Feb 2, 2017

Budget 2017: Indian Railways in a new avatar

Indian Railways will need to shore up its spending capabilities as this year’s performance in fund utilization has not been too encouraging

The budget has allocated Rs1.31 trillion to Indian Railways in 2017-18—an increase of Rs14,000 crore over the current fiscal year. Photo: Mint
For the first time in 93 years, India has dispensed with a separate railway budget, which has now become an important and integral part of the general budget. The budget for 2017-18 mandates Indian Railways to provide end-to-end solutions for commodities transport.

What it means is that Indian Railways will need to provide both first-mile and last-mile connectivity for transport of freight. This will open up new logistic opportunities.

For the entity booking a consignment for transport, a single-window interface will do away with many hassles. Transport integration is a win-win for both the national transporter and its customers.

The budget has allocated Rs1.31 trillion to Indian Railways in 2017-18—an increase of Rs14,000 crore over the current fiscal year. Gross budgetary support is now Rs55,000 crore. Indian Railways will need to shore up its spending capabilities as this year’s performance in fund utilization has not been too encouraging.

A recent spate of accidents leaving to heavy casualties has highlighted the need for the creation of a separate safety fund for the national carrier. The finance minister has announced the formation of a fund with Rs1 trillion to be spent over five years. The government will contribute the seed capital.

Projects to improve safety will be identified in advance and utilization of money from the fund will be governed by clear guidelines. This is a fund for which the time has come. Ancient railway tracks and bridges, train coaches and outdated signalling systems should be on their way out. The government is already committed to eliminating by 2019 all unmanned level crossings to reduce accidents.

Another welcome feature of the budget is the elimination of service charge on railway e-tickets. The finance minister has found an innovative way of promoting digital transactions and addressing queues at railway reservation offices. This would be welcomed by passengers who may have been concerned at the possibility of travel becoming more expensive.

To make travel a little more comfortable, the concept of ‘clean my coach’ services has been widened. One can expect a coach mitra (friend) to assist travellers on matters not limited to cleaning alone.

The redevelopment of 25 railway stations shall commence soon with the objective of turning them into multi-modal transport hubs that will also house shopping malls, hotels and entertainment outlets. Indian Railways has been talking about the concept for sometime.

A roadmap for generating internal resources has not been presented in the budget speech, but what the budget highlights is that tariffs would be based on costs, quality of services and competition from other forms of transport.

The budget outlines other passenger-friendly measures and green initiatives. Five hundred stations shall be made disabled-friendly with lifts and escalators being installed. Seven thousand stations will be powered using solar energy. And cleaner tracks will become a reality as there will be no toilet discharge on
tracks once all train coaches have been fitted with bio-toilets by 2019.

To improve mobility, it is proposed to increase throughput by 10%. It is a challenge as the existing capacity is already overstretched. It is proposed to seek expert international assistance for maintenance. This is welcome as it will bring in much-needed new technology.

The separate railway budget that had been the norm until last year gave us a detailed account of railway finances and plans to improve freight and passenger services. Having been merged in the general budget, it still finds a very prominent place in the speech of the finance minister.

And the icing on the cake is that the transporter’s autonomy remains untouched. The railway budget’s merger with the regular budget is off to a sound start.

Arunendra Kumar is a former chairman of the railway board. - Live Mint