To rely heavily on the PPP model, FDI ........To speed up 30 projects ........Top priority for safety, cleanliness

With less-than-desired Budgetary support from the Centre, Railway Minister DV Sadananda Gowda hopes to mop up money from other investors — both domestic and foreign — to implement his ₹65,000-crore plan.

Gowda’s Budget for 2014-15 had a ‘white paper’ feel, explaining the NDA take on what the UPA regime did to the Railways’ finances by not increasing fares.

Presenting his maiden Budget on Tuesday, he elaborated on how the losses of the passenger segment increased during the UPA regime, and how investments were “misdirected” into loss-making newer tracks rather than doubling congested ones, which would have led to financial returns.

Gowda, who is not under any coalition pressure, has routed investments into identified, prioritised projects that he believes will offer good returns.

Prime Minister Narendra Modi defined the Railway Budget as one that would set the direction not just for the Railways, but through the Railways for the entire country.

Priority projects

The Budget has identified 30 projects that are expected to offer good returns and that are to be completed on a priority basis.

From the gross budgetary support, the Minister has set 1,000 km of rail tracks for the dedicated freight corridor and also allocated ₹6,500 crore for the project.

He has also set aside ₹5,116 crore for rail connectivity to the North-East — these funds will not yield returns immediately.

But, while introducing new trains, the Railways has chosen profitable routes and regions where there was capacity, said Devi Prasad Pandey, Member-Traffic, Railway Board.

The Railways has also reduced its market borrowing for the current fiscal year to ₹11,500 crore from ₹14,688 crore last year. This, according to Arunendra Kumar, Chairman Railway Board, has been done to avoid a debt trap.

“We cannot go into a debt trap … it was going in that direction … we had to put a limit on our borrowing, because borrowing went up sharply in the last four-five years from ₹8,000 crore to ₹15,000 crore. This time we have been realistic,” he said.

Higher ticket sales

As for the revenue mop up, Indian Railways expects to garner almost 14 per cent more revenue through gross traffic receipts, after scaling down the projections made in the interim Budget. Railways hopes to meet the new earnings target, as it has already got a 16 per cent bump in revenues in the first quarter without the fare hike.

“We have corrected our projections made in the interim budget … with the introduction of newer trains and better systems of selling tickets, numbers should go up,” Pandey said.

He acknowledged that long queues at the ticket counters were a problem, which is why the Railways is now using IT. “We are looking at any means by which commuters will not have to stand in queues to buy tickets. Now, you can even buy on mobiles,” said Pandey,

While treading a realistic path, Gowda has tried pushing the envelope for the Railways in a few areas. These include mandating e-procurement for all tenders of above ₹25 lakh. He also stuck a stern note by saying that the Railway Board was becoming unwieldy, indicating administrative reforms in the railways.

Gowda said that Indian Railways will have paperless offices in five years. While this is a good move, some officials questioned how the CAG and public accounts committee, which review the railways’ papers would do so unless they also took the paperless route.

For passengers, Gowda increased the outlay for cleanliness, and also continued on the path of using information technology to deliver better services. He also planned initiatives for provision of good food and water.

In addition, Gowda said the Railways would introduce “work stations” in select trains on a payment basis for business travellers who spend a substantial amount of time travelling.

For freight users, Gowda said that he aims to introduce online registration of demand for wagons in the next two months. This will facilitate online payment of the wagon registration fee as well as help in registering demand for wagons.

While there are many such small initiatives, the challenge has just begun for this former Karnataka Chief Minister.

Railway Budget 2014 - Full coverage

(This article was published on July 8, 2014)
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