Infrastructure, reform push expected in Modi govt’s first rail budget

  • Srinand Jha, Hindustan Times, New Delhi
  • Updated: Feb 27, 2015 00:37 IST

Rail minister Suresh Prabhu is unlikely to hike passenger fares but may introduce a safety surcharge while making a big push for investment when he presents the Modi government’s first railway budget on Thursday.

At variance with the populism of his predecessors, Prabhu is likely to adopt a pragmatic approach, one backed with a dose of reforms to strengthen the creaking infrastructure of the world’s fourth biggest rail network.

The rail budget will demonstrate the Modi government’s intent on infrastructure push and morphing the country’s top employer, which is battling a severe fund crunch, into a modern enterprise.

Reform in the railways that employees around 1.3 million people has always been politically sensitive. Successive governments have backed away from modernisation, preferring instead to use the system to provide cheap transport and jobs.

Falling international crude prices were unlikely to translate into cheaper fares, sources said. A 3 to 4% safety surcharge may kick in.

With a reputation of a reformer, Prabhu is expected to corporatise the accounting process — opening the books to larger scrutiny and making the railways more accountable as far as its finances go.

The minister may lay the road map for attracting private investment and is expected to go slow in announcing new projects.

Steps to raise money from outside the budget through firming up of special purpose vehicles with public sector undertakings and state governments are likely to find a mention as well.

Though six months ago the government allowed 100% foreign investment in some big-ticket projects, funds could be raised through steps such as the branding of trains and stations and the commercial utilisation of rail land may get a look-in.

Prime Minister Narendra Modi’s constituency Varanasi is expected to gain from the infrastructure push in form of a factory for safety equipment.

A decision to import train sets from Japan or Europe for faster and comfortable travel could be announced, sources said. Premier trains like the Rajdhani and Shatabdi would be the likely beneficiaries.

“Panic buttons” may be installed in ladies compartments in one of the many measures for passenger safety and security.

The budget is likely to have a strong imprint of Modi’s Make in India and Swachh Bharat initiatives. The minister could also announce the way forward for the ambitious high-speed train project between Mumbai and Ahmedabad.

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Rail budget to signal road to reform, says minister Suresh Prabhu
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