Expansion and upgrade are the hallmarks of the Budget announced for the country’s age-old railway system on Thursday. Finance Minister Arun Jaitley pegged the capital expenditure target of Rs 1,48,528 crore for Railways, the highest ever. But more significantly, only about a third of this money is to be funded from the general exchequer’s coffers. The remaining will be funded through borrowings and monetisation of assets in various forms and shapes.
In that, 2018-19 will be the first year when Railways will have to embark on an enterprise to fund most of its own capital works. This also means the age-old practice of relying largely on free money from the government—ever since the merger of the Rail Budget, Railways does not pay dividend on the Gross Budgetary Support—to build railway infrastructure are numbered. This is a major tectonic shift in Jaitley’s Budget speech.
The focus on 18,000 km doubling of tracks, the highest ever for a year, 5,000 km of gauge conversion and elimination of unmanned level crossings, some 4,200 of them in two years, will continue. Large part of the capex will be towards capacity building through this, Jaitley said. By building third and fourth lines in already choked routes, the vision is to expand capacity and efficiency of operations.
Ever since taking over, Railway Minister Piyush Goyal has emphasised on two other fronts: track renewal and electrification. With safety being a major focus areas, Jaitley said 3,600 km of track renewal will have taken place by the end of this fiscal while a similar number is planned for the next. At the same time, 4,000 km of electrification next year will take the rail system closer to its goal of total electrification in about three-four years.
By deciding to expand the choked suburban networks in Mumbai — where the system is bursting in seams — and in Bengaluru, railways has renewed its focus on what is called the liefeline of the cities, at least in Mumbai. Mumbai local train network will see 90 km of doubling of tracks and increasing the capacity to run more trains with better efficiency. The total outlay for the project is Rs 11,000 crore.
Similarly, by deciding to expand the suburban network in Bengaluru, in poll-bound Karnataka, by 160 km, and pumping in Rs 17,000 crore for that, the government appears to be signaling a reboot of the development of the loss-making suburban services, whose ticket prices are highly subsidised and the clientele is so price-sensitive that any hint of a fare hike has always been considered a political self-goal.
In fact, the Modi government has burnt its fingers once in 2014 when it had to roll back a proposed hike in local train fares following protests from Mumbai politicians. Recently, the all-AC local train with higher fares has received heavy patronage, giving Indian Railways the signal that maybe the suburban commuters don’t mind paying if there is a definite upgrade to the archaic system. The Budget’s roadmap to invest and expand cum upgrade this system therefore needs to be seen in that context.
The move to spread the web of Wifi and CCTV in all trains and stations progressively is a bold announcement. While the key word here is “progressively”, this would make India’s the only railway system with end to end wifi coverage for its passengers. Countries like China generally offer this facility to premium products like high-speed trains. Similarly, railways has in the past argued that wifi in a moving train is an expensive proposition and considering most trains are run on sub-optimal tariffs, the value add cannot be justified financially, at least for most trains. The Budget announcement, therefore, means in Modi’s long-term Digital India scheme of things, wifi in trains is not an optional value add but part of the standard service.
Railways under Goyal recently changed its metric of classifying stations. Instead of annuals earnings, stations are now categorized in terms of footfalls. Therefore, the announcement that all stations with over 25,000 footfalls to have escalators, translates into a mammoth project. This could mean most of the 8,000-odd stations will get escalators.
Prime Minister Narendra Modi has often mentioned in meetings with bureaucrats and also publicly at times, that people would not mind paying more for a train ride if they get the commensurate value for their money, like speed, amenities and the like. By pumping in more investment, Railways is slowly building an expanded and upgraded ecosystem that is long overdue for the 160-year-old transporter.
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