No fare hike, no new trains: Prabhu's reform-driven rail budget
Suresh Prabhu shunned the populism of the past to deliver a reform-oriented railway budget on Thursday that focused on modernising an ageing network and improving amenities for the 23 million Indians who ride its trains daily.business Updated: Feb 27, 2015 08:44 IST
Suresh Prabhu shunned the populism of the past to deliver a reform-oriented railway budget on Thursday that focused on modernising an ageing network and improving amenities for the 23 million Indians who ride its trains daily.
There were no new services to politically important regions and no plans to set up new factories, a staple of past budgets. And while there were no passenger fare increases, freight rates for some commodities rose by an average of 3%, and aggressive projections for revenues suggested that further hikes were an option if the economy continued to pick up.
The 61-year-old Prabhu, a chartered accountant by training, said he was determined to transform the Indian Railways, a monolith that employs over a million people and which made a massive Rs 26,000-crore loss in its passenger operations last year.
“It will take time to neutralise the legacy of the past. It cannot be business as usual”, he said, outlining an outsize 52% increase in spending this year compared to the normal 10-12% yearly rise. A tenth of the spending will go towards building dedicated freight corridors.The railways, with their vast reach, are a key lever in Prime Minister Narendra Modi’s plans to boost the Indian economy, which is projected by the World Bank to grow faster than China’s next year.
So Prabhu, seen as a modern-minded technocrat, was parachuted into the ministry in November; he did not disappoint in an hour-long speech by outlining plans for Wi-Fi at 400 stations, CCTVs in trains for women’s safety and easier norms for unreserved tickets.
India will import a couple of trains which will run at up to 160 kilometres per hour on existing tracks, a full 30 kmph faster than the country’s speediest train. Under the PM’s pet Make in India scheme, production of such trains was likely to be indigenised, Prabhu said.
Modi tweeted soon after Prabhu’s hour-long speech: “The rail budget is futuristic and passenger-centric and lays out a clear roadmap to make the national transporter the key driver of the country’s economic growth – combining a clear vision and a definite plan to achieve it”.
But Congress president Sonia Gandhi was unimpressed. “Rail Budget 2015 is very disappointing, they are only presenting old UPA’s initiatives revamped,” the party’s Twitter handle quoted her as saying.
Prabhu also listed novel plans to raise money from foreign pension funds and multilateral development banks to finance an ambitious five-year plan.
Over this period, Prabhu plans to increase the daily passenger carrying capacity to 30 million; increase the track length by a fifth to 138,000 kilometres and increase the annual freight carrying capacity by 50% to 1.5 billion tonnes.
Read: Indian Railway Budget Speech 2015-16