26Feb

Rail Budget 2015-16 India Update : Suresh Prabhu’s Speech (PART 2)

Mr. Suresh Prabhu’s Speech Continues…….

9. I believe that good governance emerges out of participative government. In a very short span of time I have visited most of the states; tried to interact with many employees, stakeholders and customers. I took the initiative to connect directly with the users through social media. I am glad to inform that over 20000 suggestions were received and we have already started working on the feasible ones. You may also find some incorporated in this budget. This experiment gave me an insight into how involved people are with the Railways and their will to see it getting better and reaffirming its position as the growth engine of this country.

10.We have prepared a forward-looking agenda. Over the next five years, IR has to go through a transformation. We have fixed four goals for ourselves.
a) To deliver a sustained and measurable improvement in customer experience. We are launching initiatives that will systematically address customer concerns about cleanliness, comfort, accessibility, service quality and speed of trains.
b) To make Rail a safer means of travel.
c) To expand Bhartiya Rail’s capacity substantially and to modernise infrastructure. Given the importance of rail travel for our citizens we will increase our daily passenger carrying capacity from 21 million to 30 million. We will also increase track length by 20% from 1,14,000 km to 1,38,000 km, and we will grow our annual freight carrying capacity from 1 billion to 1.5 billion tonnes.
d) Finally, to make Bhartiya Rail financially self-sustainable. This will mean generating large surpluses from our operations not only to service the debt needed to fund our capacity expansion, but also to invest on an on-going basis to replace our depreciating assets.
This will require material improvement in operating efficiency, tighter control over costs, greater discipline over project selection and execution, and a significant boost to Railways’ revenue generating capacity.

11.These goals will also ensure that Railways is an integral part of all the flagship programmes that our Prime Minister has launched for improving the quality of life of the downtrodden, from Swachh Bharat to Make in India, and from Digital India to Skill India.

12. How will we achieve this? Our execution strategy will have five drivers:

a) Adopting a medium-term perspective: Any organization must address short-term priorities without glossing over the long-term and medium-term vision. As Vinoba Bhave once said, “You will stumble if you look close to your heels and would certainly fall if you ignore the vision of the long road.”
Madam Speaker, this Railway Budget is part of a trilogy of documents that chart out our vision for the future. The first in the series is the White Paper that has been placed today for the information of the House. The second part is today’s Budget for the year 2015-16. This will be followed by a Vision-2030 document that we intend to bring out later this year. The proposals contained in this Budget should, therefore, be seen as the beginning of a Five Year Action Plan to transform the Railways.

b) Building Partnerships: Transforming the Railways will require us to partner with the key stakeholders. First, consistent with the Prime Minister’s vision of cooperative federalism, we will work closely with the States to make the Railways the backbone of national connectivity. Their economies and citizens will benefit dramatically from an improved railway system. The voice of the locals will reverberate through the State Governments in the planning and execution of railway projects. They will also be able to raise financing through special purpose vehicles that we will create with them. Most of them have already expressed a keen interest to make the improvement of the Railways a joint endeavour and a shared success. Second, we will partner with PSUs to ensure that sufficient capacity is built to transport critical commodities like coal, iron ore, and cement, etc., from where they are extracted or imported to where they are consumed or processed. Third, we will partner with multilateral and bi-lateral organizations and other governments to gain access to long term financing and technology from overseas.
Finally, we will partner with the private sector to improve last mile connectivity, expand our fleet of rolling stock and modernize our station infrastructure. Here I must mention that Rail will continue to be our precious national asset. It will continue to serve the common man. The people of India will always own Railways.

c) Leveraging additional resources: Over the next five years, we envisage an investment of Rs 8.5 lakh crore. A broad indicative five-year investment plan is attached as Annex 1 to the speech. Budgetary support is the quickest and easiest option to finance the plan but the Ministry of Finance also faces challenges of competing demands although a small initial contribution to Railways can be catalytic. But the scale of our investment needs is such that it will require us to seek multiple sources of funding. We will tap other sources of finance. Multilateral development banks and pension funds have expressed keen interest in financing new investments. Their time horizon is aligned with ours. They seek sources of predictable and recurring revenue, which we can provide through the issuance of long-term debt instruments to fund revenue generating railway projects.

d) Revamping management practices, systems, processes, and re-tooling of human resources: To get the most out of the additional resources that we will be investing, we will need to ensure the highest standards of operational and business efficiency. I am happy to report an improvement on our financial performances in the year 2014-15 relative to what we had anticipated earlier. I propose the operating ratio for 2015-16 at 88.5% as against a targeted operating ratio of 91.8%in 2014-15 and 93.6% in 2013-14. I am pleased to state that not only will this be the best operating ratio in the last 9 years but the best after the VIth Pay Commission.
The Railways will not be able to deliver sustained improvement in operating efficiency unless changes are made to speed up decision making, tighten accountability, and improve management information systems. Our people are our biggest asset. Even in the short term that I have held this portfolio I have seen the enthusiasm and dedication of Railway personnel across the country. For our transformation journey to succeed it will be very important to harness the talent of our employees through training and development.

e) Setting standards for Governance and Transparency: The Railways belongs to the whole nation. Its functioning must conform to the highest standards of governance and transparency. Indian Railways’ decisions must be fair to all our stakeholders; from our poorest customers, to our employees and our business partners. My first decision as a minister was to delegate all my tender approving powers to the level of general managers. Transparency has many dimensions. It requires better quality of information gathering within that system and improved norms for disclosure of that information. It requires reduction of discretion and standardization of procedures. It requires accountability. Studies have shown that greater transparency and accountability are pro-poor instruments, since the relatively poor suffer more from lack of transparency. Apart from delegation of powers, I am proposing to undertake measures with a view to bringing in transparency in the day-to-day activities benefitting the common man.

Mr. Suresh Prabhu’s Speech Continues…….

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