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Best budget in recent times, but better infrastructure needed

"By bringing down fares, I feel, the Railway Minister has yet again demonstrated that railways is for the masses." JP Batra, Former Chairman, Railway Board, talks to Samiran Saha.

india Updated: Feb 27, 2008 04:26 IST
Samiran Saha

I think this is one of the best railway budgets in recent times. It has something for every one from the common man to the industry — the cuts in passenger fares, reduction in freight rates for petrol and goods transported to the Northeast. There is reason to cheer this forward-looking budget.

However, I feel what was required in this budget is some direction for the railway infrastructure. If we need to sustain or touch the near double digit growth we need better infrastructure in place.

If we need to emerge as a truly developed nation we must address the issue of railway infrastructure. For example a developed nation like Spain has all its cities connected by high-speed corridors. Better connectivity would lead to faster economic development.

Even if we start planning high-speed corridors today, it will take us at least 10 years to complete whereas other developed nations already have such corridors, making movement of passengers and goods faster.

I am happy the Railways have generated a surplus of Rs 25,000 crore this financial year from Rs 21,000 crore in the last financial year. We need to reinvest this surplus and create better infrastructure at a faster pace.

In his budget the Railway Minister hopes to generate about Rs 1,00,000 crore from the public-private partnership route, to expedite the creation of railway infrastructure. Railways must generate more and try to continue to grow at a faster pace to join the league of developed nations.

The Railways are also leasing out property for commercial proposition to maximize returns. This again is an exercise to generate internal resources. No property is being sold. This will also help creation of better cold chains and give fillip to the agriculture sector.

Railways Minister Lalu Prasad has also revised the freight target to 800 million tons from 785 million tons and the per ton earnings have also gone up from Rs 57 crores to Rs 62 crores this will also help generate revenues.

In the 10th Five-year Plan, the budgetary support for the railways was 42 per cent of the plan outlay but in the 11th Plan it is down to 25 per cent at Rs 250,000 crores so we need to increase internal generation that will help creation of infrastructure faster.

The across-the-board cut in freight tariffs is also a sign of railways carrying more. We are now doing business in volumes. Take the example of fly ash, Railway have decided to cut the fly ash freight rates by 14 per cent. This will encourage more fly ash utilisation by the cement companies thus bringing down their input cost.

This is also good enough to keep our wagons in use and earn revenue from them.

By bringing down fares, I feel, the Railway Minister has yet again demonstrated that railways is for the masses. The costs are lower than what the low cost airlines charge. By reducing fares, he has ensured higher occupancy, especially of air-conditioned coaches and chair cars. The reality is that passengers have a variety of choice in a competitive environment that has been thrown open with the advent of low-cost carriers.