13 Things You Should Know About Suresh Prabhu's Rail Budget

26/02/2015 3:27 PM IST | Updated 15/07/2016 8:25 AM IST
PRAKASH SINGH via Getty Images
Indian Railways Minister Suresh Prabhu (R) and Minister of State for Railways Manoj Sinha (2R) pose for media as they arrive at Parliament House in New Delhi on February 26, 2015. India's rail minister has promised to revive railways through reforms, to take forward Prime Minister Narendra Modi's economic agenda, as he prepares to present his government's first rail budget. Suresh Prabhu said railways holds a pivotal place in his government's economic agenda as he hinted at major rail reforms in the budget. AFP PHOTO/ PRAKASH SINGH (Photo credit should read PRAKASH SINGH/AFP/Getty Images)

Railway Minister Suresh Prabhu didn't touch fares, refrained from introducing new trains and stuck to measures to increase safety and efficiency in Indian Railways, mindful of the finances of an organization that lacks resources to even cover the cost of depreciation of existing assets.

Prabhu talked about steps for raising revenue without relying just on budgetary support, by tapping into pension funds and partnerships with private players. No concrete measures on this count were announced. The budget speech did not contain any major announcements.

Prabhu’s speech was one of the shortest in recent times, partyly because there was no reading out of a laundry list of new trains. “That can be done later during the session," he said in a TV interview.

Here are 13 key announcements from his speech:

1. Passenger fares were not increased. This was on expected lines, after last year’s hike of 14.2 percent in passenger fares and 6.5 percent in freight costs.

2. The railways will be introducing vending machines to dispense tickets within five minutes. Some of them will allow payments through debit and credit cards. Prabhu called it “Operation Five Minutes”. Unreserved tickets can be booked on smartphones instead of standing in long lines. To ensure a higher percentage of confirmations, select trains will have 26 coaches instead of the current 24.

3. Wifi connectivity will be available at all A1 category stations, and expanded within the year to B-category stations as well.

4. Prabhu emphasised safety, and as part of that announced a spend of Rs6,581 crore to remove 3,438 unmanned railways crossings by constructing 970 bridges or under-passes. There are over 13,500 unmanned crossings around the country.

5. Operating ratio, the key measure of railways efficiency, was 91.8 percent in the current fiscal, and Prabhu set a target of 88.5 percent for the next. That would be the best performance in the last nine years. An operating ratio of 90 percent means that from every Re 1 earned, the railways will spend 90 paise and retain 10 paise as surplus. So, a lower ratio means a higher surplus that can be allocated for safety measures and modernization of the network. The best-ever operating ratio achieved by the railways was 74.7 percent in 1963-64.

6. Prabhu said an investment of Rs 8.50 lakh crore is expected over the next five years, which is an ambitious target given the poor financial health of the railways. The minister plans to tap low-cost pension funds and raise long term debt from domestic and overseas sources. The current plan outlay of Rs 1.1 lakh crore has gone up 52 percent from last year.

7. Prabhu said that high-density networks will also be modernized to achieve higher speeds. Currently, the Rajdhani express that can do 130 km/hr runs at an average speed of 70 km/hr. The speed of goods trains is even lower, which has prompted companies to opt for road transport instead, which means higher pollution because railways’ consumption of fuel is just 7 percent of the road sector.

8. Speeds of trains in nine rail corridors will go up to 160-200 km/hr from the existing 120-130 km/hr. This will help move more commercial traffic towards railways from road transport. Feasibility report of a high-speed corridor to run bullet trains, between Mumbai and Ahmedabad, is expected by mid-2015. The railways is exploring technologies so that such trains can run on existing tracks.

9. Freight rate hiked by 10 percent for urea, 6 percent for coal and 2.7 percent for cement.

10. Track capacity hiked to 1,38,000 kms from the existing 1,14,000 kms. Meghalaya has been connected to railways, and Prabhu said other north-eastern states will see higher frequency of trains.

11. 17,000 bio-toilets will replace existing facilities across stations. This proposal has been a long-standing demand to make sure such facilities are clean. Currently unclean toilets in stations and trains is a major complaint of frequent passengers.

12. Prabhu has decided to tackle high levels of encroachment of railway land by digitizing records. Rs2,000 crore has been allocated for the purpose. There are approximately 1.21 lakh encroachments on railway-owned land covering an area of 2,337 acres.

13. Railways, the largest consumer of electricity in India, is going green by first installing 1,000 MW of solar power. This will be expanded to all parts of the railways where solar power can be harnessed.

"Railways can be way more efficient than road transport, if the measures are implemented," said Nalin Jain, President and CEO, GE Transportation.

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