Rail Budget 2015: No new trains, no passenger fare hike, tickets 120 days in advance

Mangalore Today News Network

New Delhi, February 26, 2015: Giving travellers 120 days to book their tickets and without tinkering with fares or announcing new trains, Suresh Prabhu presented his maiden budget for the Indian Railways in the Lok Sabha on Thursday, which promised to balance passenger needs and long-term interests of the organisation and benchmark it globally on quality, safety and reach.

 

"There will be no hike in passenger fares. We will focus on improving passenger amenities, including cleanliness," Railway Minister Prabhu said in a 66-minute speech in the Lok Sabha, watched keenly by Prime Minister Narendra Modi who had handpicked him for the job. He also made no mention of any revision in freight tariff, as has been the norm in the past.

No new trains, says Prabhu

No announcement of a new train was another highlight of Rail Budget 2015 with some experts calling it a first. Among the other highlights of Prabhu’s Budget were nine more high-speed trains, faster speed of existing trains, Wi-Fi in 400 stations, user-friendly ladders to mount upper berths, easier norms for unreserved tickets, 17,000 bio-toilets in trains, better connectivity in north-east, and cameras for safety of women travellers.

The minister also promised all this with a vastly improved operating ratio, which spells out how much money is spent on day-to-day operations to earn revenues -- an indication of the funds left for safety and expansion. He targeted to bring this down to 88.5 percent, or the lowest in nine years, from an unsustainable level of 93.6 percent in 2013-14 and 91.8 percent for this fiscal. This is better than what the prime minister had asked the railways a few days ago. Globally, a 75-80 percent or lower is seen as a healthy benchmark.

Prabhu also seemed to have ruled out the sale of surplus land and other assets of Indian Railways. "We will monetize our resources than sell them for finances," he said, adding: "Business as usual of asking for budgetary support from finance ministry is neither sustainable nor necessary."

What ails Indian Railways?

The minister began with what ails Indian Railways. "Facilities have not improved substantially for the past few decades which is the result of under-investment that affects capacity, leading to poor morale. This fed into vicious cycle of chronic under-investment for a long time."

Emphasising that safety, quality of service, standards and efficiency all suffered due to poor financial resources available with the Indian Railways in recent decades, the minister said adding all this further fed into the cycle of poor investment. "This must be put to an end," said the chartered accountant-turned-politician, while presenting the budget for one of the largest railway network in the world. "We have to make our Indian Railways a benchmark organisation in safety, security and infrastructure," he said in a speech peppered with several Hindi couplets.

"Hey Prabhu, how will this happen?"

Playing with words, he invoked God (Prabhu) and said: "One of the first things I asked was ’hey prabhu, how will all this be possible?", bringing the House down with a pun on his name. Then, he went on to say that he took it upon the mortal ’Prabhu’ to accomplish the task ahead.

Earlier, the minister presented a white paper on Indian Railways, which he said will form a trilogy of what plans he had in mind for one of the largest such networks in the world along with his budget for 2015-16 and a Vision 2030 document to be presented later in the year. He also set four goals to transform Indian Railways: Improved customer experience, safer travel, modern infrastructure and financial self-sustainability. "We will also create a separate department for taking care of cleanliness."

For the record, India boasts one of the oldest and the largest railroad networks in the world, ferrying some 23 million people, or a population the size of Australia, as also 2.65 million tonnes of goods on its coaches, each day. It serves from 7,172 stations via 12,617 passenger and 7,421 freight trains on a track network spanning Baramulla in the Himalayan foothills of Kashmir to the southern tip of Kanyakumari in Tamil Nadu, and from Naharlagun in Arunachal Pradesh to the port town of Okha in Gujarat.

Prabhu proposes lowest operating ratio in 9 years

Addressing the pressing issue of finances for the Indian Railways, Prabhu proposed an operating ratio below 90 percent to increase revenues for the system. The railways’ operating ratio, that has been consistently above 90 percent for the past five years, suggests how much money is spent on day-to-day operations to earn the revenues, giving an indication of the funds left for safety and expansion.

"I have proposed an operating ratio at 88.5 percent -- as against the targeted ratio of 92.5 percent for 2014-15, which has improved to 91.8 percent," Prabhu said presenting the Railway Budget for 2015-16 in the Lok Sabha. "This (proposed) operating ratio will be the best in nine years," he said.

While a ratio of 93 percent means it saves just 7 paise on every 1 rupee it earns from operations, the latest rail budget comes at a time when its finances and efficiency are, perhaps, at their worst. Globally, a figure of 75-80 percent or lower is what is seen as a healthy benchmark, but India ranks among the worst networks on this count.

Prabhu said the railways need $100 billion or Rs.6 lakh crore in funding over the next 3-4 years.

 
Courtesy: Indiatoday