Finance Minister Arun Jaitley termed the merger of the Rail Budget with the Union Budget “a historic step” even as he stressed that the “functional autonomy of the Railways will continue.”
While his Budget 2017-18 speech took on board most of Railway Minister Suresh Prabhu’s proposals, some critical ideas that would have otherwise figured in Mr. Prabhu’s own Budget didn’t make it past North Block, such as the formation of a holding company for all public sector rail firms, a rail regulator and a fund for financing rail projects.
All other announcements related to the Railways made by Finance Minister Arun Jaitley were based on Mr. Prabhu’s proposals, including the move to set up a rail safety fund named ‘Rashtriya Rail Sanraksha Kosh’ with a corpus of ₹1 lakh crore over a period of five years.
Documents reviewed by The Hindu showed that Mr. Prabhu had suggested 30 points to be incorporated in Mr. Jaitley’s Union Budget speech during discussions with the Finance Ministry.
Solar power
The Union Budget announcement to redevelop 25 railway stations, set up solar power at 7,000 stations, provide lifts and escalators at 500 stations, provide end-to-end integrated transport solutions for various commodities, form a single window for coach-related complaints, increase the throughput by 10% were all proposed by the Railway Minister.
The March 2019 deadline for rolling out accounting reforms with accrual-based financial statements was also a Rail Bhawan idea.
However, some proposals were lost in transmission. While the Railway Minister had proposed Mr. Jaitley to announce a new holding company named Rail Holdco for its stakes in 13 public sector Railways-related enterprises, Mr. Jaitley only referred to the listing of three railway PSUs on the stock markets — IRCTC, Indian Railway Finance Corporation and IRCON.
A top finance ministry official said that the holding company proposal needs more deliberations and is under consideration. “No final decision has been taken on that proposal. These are two separate things. We have only talked about the listing of three PSUs. And there is no conflict between the two,” Economic Affairs Secretary Shaktikanta Das told The Hindu.
However, top officials in the Rail Bhawan see Mr. Jaitley’s announcement as a “full stop” to Mr. Prabhu’s idea of creating a separate holding company for 13 rail PSUs.
Mr. Prabhu had told the Finance Minister that a holding company will give “opportunity to these companies to enhance their valuation which can be monetised at a later date, as and when need arises to meet investment needs of Railways.”
The Department of Investment and Public Asset Management in the Finance Ministry had, however, indicated its opposition to the idea, another top Railway Ministry official said.
Mr. Prabhu had also proposed setting up Rail Development Authority for a “level playing field” and “to restore balance between passenger and freight traffic” by setting fares. However, Mr. Jaitley’s Union Budget speech gave it a miss and instead said that “the tariffs of Railways would be fixed, taking into consideration costs, quality of service, social obligations and competition from other forms of transport.”
Development authority
A Railway Board member said that the Finance Ministry wants more deliberation on the proposal to form a Rail Development Authority.
“The Finance Ministry has asked us why the Railways can’t set fares based on various factors including inflation, oil prices and other input costs rather than go for a separate authority,” a Railway Ministry official said.
The Railway Minister had also mooted setting up a Railways of India Development Fund.
“Indian Railways, in association with World Bank, has undertaken a scoping study for setting up a Railways of India Development Fund, for financing projects in entire railway sector by pooling funds from pension, insurance and wealth,” Mr. Prabhu said in his proposal.
