Budget 2015


Rail Budget 2015-16 India Preview : Prabhu needs to look for ways to raise funds

The world’s largest passenger carrier (23 million a day), fourth-largest freight carrier (1 billion tonne a year) that operates 19,000 trains daily covering a 65,000 kilometres of route length, the Indian Railways truly is a story of scale.

However, another story that has run alongside and grew every passing year is the one of stagnation, thanks to the perennial dilemma of whether it should operate as a commercial enterprise or serve as a welfare organization.

The table below charts the railways’ financials over the past seven years. Railways has managed to just about meet its expenses and create some bit of surpluses, as can be seen in the gross receipts and working expense figures.


But the surplus, a few thousand crores every year, is a drop in the bucket compared to the capital required for railways to meet their expansion projects. For ongoing projects alone, capital worth Rs 1.57 lakh crore needs to be infused.

The story lies in failures of two kinds.

One, over the years, governments have been extremely hesitant in hiking fares for passenger, while choosing to increase rates of freight, to the point that the latter has been subsidizing the former for a long time.

For instance, the average rate charged by railways to a passenger for a kilometre’s distance went up from 24.5 paise in 2003-04 to 27 in 2010-11. Over the same period, the average rate to carry a tonne of freight a kilometer has increased from 71.88 paise to 101.47.

As a result, while the passenger division has been consistently making losses (it accounts for roughly half the railways expenses and brings in less than one-third its revenues), ever-increasing freight rates have only resulted in companies increasingly deciding to transport freight by road.

The market share for freight has come off from 90 percent in the 1950s to about 42 percent now.

The only conceivable way for railways to upgrade systems, boost cleanliness, improve safety mechanisms and provide more comfortable travel while expanding its capacities is to invite private capital.

In the last railway budget, the government allowed 100 percent foreign direct investment in several sectors aside of transportation.

So also, it focused on trying to revive the public-private partnership (PPP) model, which has till now failed to take off in any meaningful way because earlier railways would hardly leave any incentive for the private sector to come in.

So when Suresh Prabhu gets down to read the railway budget speech on Thursday, beyond the routine announcements of new trains and newer projects, analysts will look for the big ticket ideas on how railways can raise the funds it badly needs.

While there are expectations passenger fares or freight rates may not be touched – the increase last year just prior to the rail budget resulted in a furore – Prabhu should outline ways in which the government’s push last year has yielded results.

Ways to bring in more local and foreign capital, monetize assets, cut costs, promote more indigenous manufacturing, improve access to low-cost funding, boost governance by overhauling IT infrastructure as well as forming an independent authority to decide on rail tariffs would be key on observers’ minds.


Rail Budget 2015-16 India Predictions : Fare hike unlikely; stress on Make in India & cleanliness

Just a day before the Narendra Modi government is set to unveil the Rail Budget, sources say that its focus will be on attracting investment, modernisation of trains through Wifi and transparency in railway systems.

Sources say that a lot of suggestions from the Prime Minister’s office have been incorporated in the Budget. While a fare hike is unlikely across the board, a cess for cleanliness cannot be ruled out.

As high speed corridors cannot come out of the railway resources only, the focus is likely to be on joint ventures and Foreign Direct Investment in the Budget. As per sources, the emphasis of the government is to build a Public private partnership for raising money. NGOs, corporate sectors can advertise on the coaches of railways to generate more revenue.

Railway sources: 59,000 coaches to be converted into vacuum toilet, a technology that’s available in air planes. Cleanliness of stations and bio toilets is likely to be the thrust of ‘swachh’ (clean) railways.

Railway Minister Suresh Prabhu is likely to make announcements of a series of green initiatives, focus on cleanliness and build an interactive customer portal for direct feedback from passengers. Prabhu is likely to emphasise upon finishing the existing projects.

To ensure safety and security, a proposal to install CCTVs in coaches and on stations is likely to be presented.

It is likely that lesser number of new trains will be announced in comparison to the previous budgets of the Congress-led United Progressive Alliance government. According to sources, the minister feels that announcement should be done after study of feasibility and economic viability.

Sources also say that 2016 onwards, only those Linke Hofmann Busch (LHB) coaches will rolled out which have bio toilets. The old coaches will have green toilets. Stations which don’t see too many trains will see better utilisation of the space for skill development programme of the Prime Minister.

The focus of the Budget will be on Make in India so indigenous technology will be pushed, claim sources.


Rail Budget 2015-16 India Preview : Focus resurrection of Railways

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Rail Budget preview 2015-16

Rail Budget 2015-16 would act as an enabler in beginning the process of resurrecting Indian Railways, which has been ailing due to varied reasons ranging from policy to operations. One of the most prominent focus issues for the new government would be the financial restoration of the national carrier: Indian Railways (IR). IR with nearly 64,460 km route length is the fourth largest network in the world, operating close to 19000 trains a day and transporting about 2.65 million tonnes (MT) of freight traffic and 23 million passengers. However, over the decades severe red tape and populist measures have taken their toll on the carrier with monumental losses and operational inefficiencies creeping into the system. According to recent data, railways is reeling under huge losses in its passenger segment of nearly | 24,600 crore in FY13, up 9%, from | 22,500 crore in FY12 and needs concrete steps to overhaul both its finance and operations. With a dismal operating ratio of 90.8% in FY14 (RE) it is imperative for railways to modernise its network and improve its yield in the passenger segment. We believe the Railway Budget 2015-16 will focus on enhancing safety and services by driving better internal generation of resources (fare hike in June 2014 is a step in that direction). The hike in railway fares would provide a buffer to the Railway Minister through which he would be able to spend on better amenities for passengers and somewhat enhance IR capacity through capex to improve the operational efficiency of existing network.


आज आएगा रेल बजट, सुरेश प्रभु का पहला रेल बजट

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आज पूरे देश को जोड़ने वाली रेलवे का बजट आने वाला है। खबरों के मुताबिक यात्री किराए में बढ़ोतरी के आसार काफी कम हैं, लेकिन सुरक्षा के अलावा एफडीआई और पीपीपी के जरिए निवेश को बढ़ाने की कोशिश हो सकती है।

इस बार के रेल बजट में यात्री और माल भाड़ा बढ़ने की उम्मीद कम है। लेकिन रेल मंत्री रेल लाइनों की डबलिंग और ट्रिपलिंग, सुरक्षा के लिए हेल्पलाइन जैसे ऐलान करने जा रहे हैं। साथ ही रेलवे में निवेश बढ़ाने के लिए पीपीपी के अलावा स्पेशल पर्पज व्हीकल (एसपीवी) के जरिए राज्य सरकारों की भूमिका पर जोर दिया जा सकता है। इसके साथ ही रेलवे की जमीन के कमर्शियल इस्तेमाल पर भी जोर दिया जा सकता है। यहां कल के रेल बजट पर खास चर्चा की जा रही है।

भारतीय रेल 64,460 किलोमीटर लंबा रूट जो दुनिया का चौथा सबसे बड़ा रेलवे नेटवर्क है। भारतीय रेल से रोज 26.5 लाख टन माल की ढ़ुलाई होती है। और रोज 2.3 करोड़ यात्री भारतीय रेल से सफर करते हैं।

भारतीय रेल की सेहत की बात करें तो वित्त वर्ष 2014 में यात्री सेगमेंट में इसको 30,000 करोड़ रुपये का घाटा हुआ है। मार्च 2014 तक  भारतीय रेल को प्रति यात्री 23 पैसे प्रति किलो मीटर का घाटा उठाना पड़ा है। छठे वेतन आयोग की सिफारिशों से भारतीय रेल पर 70,000 करोड़ रुपये का अतिरिक्त बोझ बढ़ा है। भारतीय रेल को अपने 359 अधूरे प्रोजेक्ट पूरे करने के लिए 1.8 लाख करोड़ रुपये की जरूरत है। इसके साथ ही गोल्डेन क्वॉड्रिलेट्रल प्रोजेक्ट पूरा करने के लिए इसको 9 लाख करोड़ रुपये की जरूरत है।

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