Finance minister Arun Jaitley has set a March 2019 deadline for the railways for establishing an accrual-based accounting system and has underlined the need for the state-owned transporter to take “transformative measures” in the way it conducts its business.
The policy announcements are in line of the NDA government’s philosophy of formulating an integrated transportation policy including the roads, rail, aviation and the shipping sectors.
Expressing satisfaction that he was announcing the first combined budget, Jaitley said that this would bring about a synergy to provide for an equitable growth.
The 92 year old practice of a separate rail budget has been done away with this year.
He also hinted that a Rail Tariff Authority – called the Rail Development Authority – would shortly be set up to take decisions on freight and passenger tariffs by taking into account factors such as the cost of providing the service, quality of services offered and the social obligation needs.
The Finance Minister’s announcements indicate that there is likely to be little let-up in the ministry’s ongoing restructuring and reform programme.
The private sector finds several positives emerging from the Finance Minister’s speech. He announced that stocks of three rail public sector undertakings would be listed on the various stock exchanges and also defined sectors and activities that would benefit from private participation. These include providing end-to-end services in freight transportation and rolling stock manufacture.
“The set of initiatives announced seem to acknowledge the challenge that Railways is losing share in both freight and premium passenger services to alternate modes of transport, and hence an integrated approach to improving safety, cleanliness and passenger comfort, and higher levels of service to freight customers”, said Biswanath Bhattacharya of KPMG India.