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Rail Budget: Suresh Prabhu to balance modernisation with financial cost

Union minister Suresh Prabhu is likely to focus on modernising and turning around the ailing Indian Railways with the slogans ‘nav arjan’ (new earnings), ‘nai punya’ (new benchmarks) and ‘nav sanrachna’ (new structures) when he presents his second budget on Thursday.

india Updated: Feb 24, 2016 20:43 IST
Srinand Jha
Suresh Prabhu

Railway Minister Suresh Prabhu with his MOS Manoj Sinha before presenting the 2014 Budget.(Mohd Zakir /HT Photo)

Union minister Suresh Prabhu is likely to focus on modernising and turning around the ailing Indian Railways with the slogans ‘nav arjan’ (new earnings), ‘nai punya’ (new benchmarks) and ‘nav sanrachna’ (new structures) when he presents his second budget on Thursday.

A direct passenger fare hike is unlikely despite a financial crisis plaguing the railways that ferries around 23 million people daily on its 65,000-km-long network.

Additional amenities for passengers including escort services for the handicapped and “carry home” bedrolls are likely to come attached with a price tag. There is also a possibility of a “modernisation cess” on passenger tickets, the sources added.

Prabhu is expected to announce a slew of passenger services including a new train for economically weaker commuters – likely to be called the Samarth Express.

Prabhu has to tackle the problem of balancing ambitious plans to modernise India’s aging railway infrastructure with the sheer cost of developing them. (AP)

The sources said the plan outlay is likely to be pegged around Rs 1.25 lakh crore in the budget that will put emphasis on monetisation of assets and capacity enhancement as business strategies aimed at pulling out the 163-year-old transporter from inertia and financial crisis.

The railway minister is likely to elaborate on strategies to scale up operations to improve freight earnings -- such as the introduction of high-speed parcel trains and roll on-roll off container services. He also has plans to refurbish 400 railway stations with private-sector participation.

Read: Expectations high as Prabhu set to present his second railway budget

The railways failed this year to meet the operating ratio target of 88.5% but it is likely to be fixed at 91.5% for the next fiscal, the sources said.

Project implementation either in PPP mode or as joint venture projects with state governments or PSUs – with an emphasis on port and coal connectivity projects - are likely to be other highlights.

Read: Watch | What you can expect from Rail Budget 2016

Prabhu is also likely to announce the much talked-about National High Speed Rail Corporation (NHSRC) to implement Prime Minister Narendra Modi’s pet plan of running bullet trains.

The sources said Prabhu will give a progress report on an agreement with the Japanese government to execute the Mumbai-Ahmedabad line, as also on plans to procure six next-gen trains proposed to run on Rajdhani and Shatabdi routes.

Read: Railway resources constantly dwindling, not used optimally: Prabhu

The budget is likely to contain IT initiatives aimed at providing free WiFi at select stations and on-board entertainment services such as gaming and online retailing options.

“Plans for enabling the Indian Railways Catering and Tourism Corporation’s (IRCTC) foray into online retailing on the lines of Flipkart or Snapdeal will also be announced,” a source said.

The minister will also refer to progress made towards setting up a tariff regulatory authority to decide on freight and passenger rates but a bill to implement it is unlikely to be moved during the ongoing budget session of Parliament.

The sources said the budget speech is likely to elaborate on a start-up policy aimed at enabling business opportunities for entrepreneurs in rail-related services.