Ambitious, not overly adventurous, Rail Budget
The over-arching highlight of the Railway Budget for 2015-16 is the precision in the document over both meeting the demands of commuter satisfaction and taking into consideration the need to improve the grim financial situation of the country's public sector behemoth.
From all accounts, Minister for Railways Suresh Prabhu had a tightrope to walk on, and he has done it quite well. The criticism that he has presented a ‘populist' budget by not increasing passenger fare is flawed. Had he been populist, he would have announced a slew of new trains — as many of his predecessors routinely did, without bothering to study the economic consequence of the decision.
There is a solid reason for not having increased passenger tariff, which is that the people believe, even given the low fares that exist now, that the level of services, ranging from cleanliness to the quality of food to rail safety (including at manned and unmanned level crossing) to punctuality, is pathetically low. Unless there is a marked improvement in these areas, any significant increase in passenger fares can seem unjustified.
True, many of these issues have in some measure got to do with paucity of funds, but there are areas that can be tapped for money. It is also true that passenger fares, already heavily subsidised, are among the lowest in the world. But then again, people will more readily pay an enhanced amount if they see an improvement on the ground first.
This is the reason that Mr Prabhu, while not announcing an enhancement in passenger fares, has gone ahead with a spate of schemes that, once effectively implemented, will change commuter experience for the better, and condition users of Indian Railways to pay more.
For instance, tickets can now be booked four months in advance (from the existing two months); passengers can use toll-free helplines for security-related complaints; surveillance cameras will be installed in select as well as suburban trains for the safety of women passengers; SMS alert services will be introduced for arrivals and departures; ‘Operation five-minute' has been introduced, by which ticket-less passengers will get regular tickets within five minutes of their entering a station.
The Minister has also announced improvements in and expansion of existing railway lines so that they get un-burdened and allow for trains to run on time. This is any day better than adding more trains and choking up the system further.
Mr Prabhu had an equally daunting task in containing the declining financial health of Indian Railways. It would be wrong and even mischievous to believe that one Rail Budget can or should address the issue comprehensively. Mr Prabhu has taken a few measures, primarily on the front of raising money to fund the railways' many ambitious new and existing projects.
He has announced a record investment of over one lakh crore rupees in 2015-16 and an increase in investment to over Rs 8.5 lakh crore over the next five years. He plans to tap the foreign market, especially multilateral banks and global pension funds, to raise capital. There is no reason why these institutions will fail the Minister, since there is a clear intent to professionalise the railways. In this regard, Mr Prabhu's announcement that the operational ratio of Indian Railways, which stands at 91.8 per cent, will be brought down to 88.5 per cent, is extremely significant. It signals the Government's determination to ensure fiscal discipline and thus generate substantially more cash for the under-invested railways.