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Off the beaten track

Rail budget avoids the populist route, makes a good beginning by focusing on improving services.

By: Express News Service |
Updated: February 27, 2015 12:00:49 am

Suresh Prabhu’s rail budget for 2015-16 has some refreshing features. To begin with, there are no proposals for starting new lines or train services. Previous budgets presented lists of projects that were sanctioned without ever getting completed or trains introduced simply to pander to requests of parliamentarians. Prabhu deserves credit for avoiding this populist route. Instead of spreading resources thin in constructing new lines, he has sought to focus on improving capacity and train speeds on existing high-density networks through gauge conversion, doubling, tripling and electrification. Given no major land acquisition issues and shorter completion time, this is cheaper and also more remunerative because the projects here involve decongestion in heavy-traffic sections. This approach of prioritising investments — thankfully, the budget has allocated Rs 9,318 crore towards the Dedicated Freight Corridor, while only paying lip service to questionable vanity projects like bullet trains and the diamond quadrilateral — is welcome.

Equally commendable is the focus on consumer services — whether relating to improving cleanliness in trains and stations, an all-India 24×7 helpline, issuing unreserved tickets within five minutes or SMS alerts on updated arrival/departure times. True, some of this may look overdone: for instance, provision of concierge services for pick-up and drop in stations. Nevertheless, there is an effort to speak a new language — not of a staid state-owned monopoly, but of a service provider forced to reconcile to competition from low-cost airlines and luxury intercity buses. Lack of customer engagement is a major reason for the railways’ share in goods traffic falling from two-thirds to under a third since Independence. Prabhu may have made a beginning by acknowledging the need to accord primacy to consumers, including through setting up a separate Transport Logistics Corporation for providing end-to-end freight delivery services. But there’s a long road ahead.

Prabhu, moreover, should have gone further in resource mobilisation through passenger fare rationalisation and reducing cross-subsidisation by freight. The projected Rs 1,00,011 crore rail Plan size — a 52 per cent jump over the current fiscal — is substantially predicated upon extra budgetary resources, including some Rs 23,000 crore from public-private partnerships and the creation of special purpose vehicles to attract funds from long-term institutional investors such as insurance and pension funds. While the intention is laudable, it is not clear how soon these can materialise. A better bet would have been raising more internal funds to add to the estimated Rs 5,000 crore annual savings from lower fuel costs. There could have been no better time than now to exploit the railways’ potential as a growth driver for the economy.

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