The Railway Minister’s intent for modernisation, capacity augmentation, better governance and strengthening partnership with state governments and the private sector has received widespread acceptance.
YM Deosthalee, Chairman and Managing Director, L&T Finance Holdings, said the move is aimed at transforming the Railways from being a cost centre to a profit centre. It also strives to introduce structural and systemic reforms to create infrastructure through market borrowing. The sharp increase in planned expenditure by 52 per cent to ₹1 lakh crore for FY16 provides the spending push required.
Hemant Kanoria, CMD, Srei Infrastructure Finance, expects the domestic private sector to get more active in railway PPP projects once the revised policies address their concerns. While the Centre would provide 41 per cent of the planned investments, the success of the Budget would be determined by how the rest of the amount is mobilised.
Tilak Raj Seth, Executive Vice-President, Mobility, Siemens, said demand for railway transportation services is directly linked to the growth in the core infrastructure industries.
The implementation of key projects, including dedicated freight corridors and high horse power locomotives, will provide additional opportunities for the industry.
Parikshit Arya, Joint Managing Director, Rhenus Logistics India, said connectivity of airports with railways would give a boost to the perishable goods sector and encourage use of multi-modal transportation, besides exports. The coastal connectivity programme would help reduce freight rates.
Manish Agarwal, Partner and Leader, Capital Projects & Infrastructure, PwC India, said achievement of an operating ratio of 88.5 per cent will depend partly on fuel cost savings and largely on freight rate increase for bulk commodities. The impact of the latter would be felt on the central and state budgets, unless passed through to end consumers.
Arvind Mahajan, Head of Infrastructure and Government services, KPMG in India, said the rail budget reverses years of under-investment with about $137 billion proposed over five years. In the short term, the focus on augmenting and leveraging existing track infrastructure is a step in the right direction to make railways more viable.