Railways is an important service for the economy and for the everyday life of the people, as it holds more than 90% of long distance passenger travel. This is the reason that even after the merger of the Rail Budget, the public is interested in its impact on Railways.
Although this is the 4th Budget of this Government the announcements sound repetitive, such as early implementation of Dedicated Freight Corridors, Station Redevelopment, increasing of speed on existing lines known as ‘semi high speed’ and Bullet train.
However, the reality on the ground has not kept pace with the Budget as DFC is now targeted for opening in 2019 but not a single section has been operationalised. Similarly physical progress has been made only in two stations. Shri Suresh Prabhu had announced in his Budget that all contracts in the Railways will be engineering, procurement, construction (EPC) but till date not a single EPC contract has been made. Despite all the right steps like delegation of powers to General Managers and no resource constraint, the project delivery continues to be unsatisfactory and needs to be fixed urgently.
Emphasis on capacity building i.e. doubling of the existing single line sections, gauge conversion of all narrower lines, aggressive electrification, investment in modern signalling and rolling stock will certainly yield long-term dividends but in the absence of internal generation almost the entire capital is being arranged through Extra Budgetary Resources. In the absence of a robust revenue stream, the huge borrowings may result in an irreversible downward slide very quickly.
It is claimed that during the last three financial years, 14-15 to 16-17, an average 3000 km of broad gauge lines and 2000 km of electrification has been completed annually.
In addition, 35 PFT/Goods sheds have been commissioned and manufacture of Coaches, Locomotives and Wagons has also improved. This should have translated into additional capacity of at least 150 GMT but the ground reality is the opposite. From 2000 to 2014, the CAGR of freight traffic was 6.16%, while during during the last three financial years it was less than 2%. The trend in 17-18 is also no better than 5%, way below the growth which was taking place even without modernisation and capacity expansion. Surprisingly during the same period transport output growth was about 6.5%, power generation growth was 5.5% , indicating that Railways was losing out to other modes.
The capital budget outlay provided is 1,48,558 crore which is good news for the industry, although about 93,000 crore is going to be out of borrowed funds in the absence of internal generation.
The most praiseworthy part of the Budget is mention of Suburban sections of Mumbai and Bengaluru. Railways has been disowning the suburban traffic for quite long resulting in suboptimum transport solutions getting priority. Overall, the Railways portion of the Budget indicates the right direction. However, focus must be on the growth of the non-fare revenue, delivery of projects and programmes, and further reduction in manpower.
(Subodh Kumar Jain is a former member, Railway Board).
