The Budget Speech of Hon’ble Minister of Railways (MR) delivered in the Parliament on 25-02-2016 is very different from the speeches made by earlier MRs. In fact it is even different from the speech he made last year. He has set about transforming Railways with three core objectives – quality of customer experience, employment generation and economic growth. He has a clear vision of a system free from capacity constraints, a system that is efficient and predictable, a system that is sparkling and pristine, where people feel at ease and ease of doing business pervades entire Railway ecosystem. He faces enormous challenges both revenue side, because of “tepid” economic growth in the core sector of economy due to international slow down and on the cost side due to likely increase in cost on account of seventh pay commission recommendations. However, he has set about charting a new course and is depending on 3Rs for it – “Reorganise, Restructure and Rejuvenate”. The three pillars of his strategy are – a) New sources of revenue; b) setting new standards to improve efficiency; and c) new way to resolve issues by “Co-operation, Collaboration Creativity and Communication ”.
The performance of the last year had not been very good on Revenue front. However, the damage on this account was controlled by a reduction of expenditure by Rs. 8720 crores. He hopes to increase revenue by 10.10 % next year. He has set himself a very tough target by increasing in the capital plan next year from existing Rs. 48,100 crores to Rs. 1.21 Lakh crore. He is confident that he would be able to gear up the organization to increase the level of work through developing a new framework of public private partnership (PPP) and forming joint venture with different State Governments.
Some of the areas covered by him under the new beginning are, a) structural interventional in terms of re-organising the Railway Board and further empowering the Chairman. New areas where the Railway Board is expected to focus on are Non-fare Revenues, Speed enhancement, Motive Power and Information Technology. The PPP Cell would also work to improve ease of doing business with IR. b). He is setting up new Railway Planning and Investment Organization. Though, the contours of this has not been discussed by him, it is expected to take care of medium and long term Corporate Plans. New National Rail Plan (NRP – 2030) is to be developed with all stake holders including State Governments, Public Representatives etc., c) creating a holding company for all the PSUs of IR. IR has about a dozen PSUs and setting up of this holding company is essential so that they work in sync and build on strength of each other. d) Investing in future: He has proposed to take out ‘Research’ from the RDSO. It is a welcome step as it will free RDSO to concentrate on Standardization and Inspection work etc., for research he will be setting up SRESTHA wherein specially recruited scientists would work along with few Railway experts on research projects. He is going to set up Foreign Rail Technology Cooperation Scheme (FRTCS) which will institutionalize and take forward the work in key technology areas such as High Speed, Heavy Haul etc. e) Data Analytics and f) Setting up of Innovation Committee headed by Shri Ratan Tata and comprising of representatives of reputed investors and others.
He is also setting up 7 mission mode projects and each will have an “annual outcome based performance targets” and the Mission Directors will report to the Chairman, Railway Board. The seven missions are: a) Increase in axle-load of wagons to 25 tons from the existing 15 tons. b) Zero accidents through removing unmanned level crossings and by implementing Train Collision Avoiding System (TCAS). c) Procurement and consumption efficiency. d) Doubling average speed of freight and passenger trains. e) Hundred sidings in next two years. f) Beyond book keeping: right accounting to determine right costing which in turn will result in right price and right outcomes. g) Capacity utilization – expediting work on Dedicated Freight Corridor.
It is worth mentioning that the last of the above referred mission mode project may lead to a serious financial crisis in the Railways. As is well known but 80% of freight traffic moves on the ‘Golden Quadrilateral’ (between Delhi, Mumbai, Chennai and Kolkata). Once the Dedicated Freight Corridors comes into existence this traffic will go away from Railways to the Dedicated Freight Corridor Corporation Ltd. (DFCCIL). That is IR may loose 80% of the existing 1186.25 Million Tonne (MT) of traffic. If this happens, Railways will find themselves in a serious financial crisis unless an equal amount of traffic is generated to move on Indian Railways which would then be providing last mile connectivity beyond the ‘Golden Quadrilateral’. However, I would not go on to say that the IR may go into ’Debt Trap’ or will be in ‘red’. Perhaps they may find alternate sources but it is a serious concern and IR will have to seriously look for options particularly because they are going to borrow about Rs. 1.5 lakh cr from LIC and other institutions for investing in IR projects.
It may be noted that under his leadership work has really gone at a fast pace and they have achieved considerable progress in laying new lines and completing electrification of existing lines.
Perhaps, it is for the first time in the history of Railways that a Minister has talked about external ‘third party audit’ not only of ‘feedback from passengers’ but also about ‘catering service’ and ‘IT Security’. Earlier the passengers who wanted to go till operational halts had to purchase ticket till the next commercial halt/station. Now they will save money as they can buy the tickets till the operational halt. This is a peculiar case where passengers wanting to go till Gangapur City from Mumbai on Mumbai-Delhi Rajdhani had to purchase tickets till Delhi as Gangapur City was only an operational halt. Similarly passenger on other routes will save money.
It is a happy note that IR has planned to take ‘Digital India’ efforts to new heights. One finds a number of areas where special emphasis has been made on implementing proven IT Technology to monitor work being done on projects through ‘TV cameras on Drones’, ‘providing information and messages to passengers in smart coaches’ and ‘data analytics’. Perhaps, it is the first time that Railways workshops will utilize their spare capacity for producing goods for domestic and international markets. The changes proposed to be made in ‘procurement procedure’ for both ‘goods’ and ‘EPC contracts’ for work will go a long way and bring in transparency, efficiency and public confidence. He is contributing a great deal towards Swachchh Bharat also by promising to install 30,000 bio-toilets in the next year as against 17,000 installed this year.
He has devoted considerable part of his speech on efforts made and projects to be implemented to provide comfort amenities and service to passengers. It is also a happy change that Railway is going to revamp the ring railway system to provide relief to suburban passengers in Delhi and that they will work on Bengaluru Metro. In earlier regimes Railways did not have very close collaboration with the State Governments but in the Budget Speech MR has laid emphasis on this.
If one has to list three ‘game changers’ in the Budget I would list the MRs resolve and commitment to start “time-tabled freight container, parcel and special commodity trains on a pilot basis” and developing and providing “customer commitment charter indicating service level commitments of IR to passengers and freight customers”. These have been requested and demanded by passenger and freight customers for a long time but IR repeatedly turned ‘Nelson’s eye’ to them. The third one is rejuvenating the Internal Audit System and expanding its scope to include audit of train operations too.
It is really heartening to see a conscientious Minister who has been forthright and transparent enough to list out 139 promises that he had made last year in the Budget Speech and reporting how much he achieved against each item – listing item by item in transparent and fair manner.
