RAILWAY BUDGET: KEY TAKEAWAYS FOR THE INDUSTRY AND COMMUTERS

Indian Railways (c) Reuters

Hon'ble Minister of Railways, Shri Shashi Prabhu presented his second budget speech on February 28, 2016. Rail Budget is the Annual Financial Statement of the state Indian Railways, which handles railtransport in India.

It is presented every year by the Minister of Railways, representing the Ministry of Railways, in the parliament. The budget tries to highlight the current financial condition of the railways and future plan. However, the minister decided to revamp the budget presentation and announced the vision for Railways.

Currently, Indian Railways is seeing decline in both passengers ridership and freight business. The modal share of Indian railways has declined from 62% in 1980 to 36% in 2012.

One of the major refrom is that the ministry will setup 'Rail Development Authority' to enable fair pricing of services, promote competition, protect customer interests and determine efficiency standards.

The ministry will follow three pillars strategy - New Revenues, New Norms and New Structures. The minister has unveiled a Vision 2020 for Indian Railways and promised to work towards following areas:
 
a) Reserved accommodation on trains available on demand
b) Time tabled freight trains
c) High end technology to improve safety record
d) Elimination of all unmanned level crossings
e) Improved punctuality
f) Higher average speed of freight trains
g) Semi high speed trains running along the golden quadrilateral
h) zero direct discharge of human waste
 
Key Facts about Indian Railways

Some of the key facts about Indian Raiwlays are:

  • The first train on Indian soil ran between Bombay and Thane on the 16th of April 1853
  • Indian Railways has about 65,808 route kms. of track and employs about 1.55 million people
  • It carries over 13 million passengers & 1.3 million tones of freight everyday
  • It runs about 14,300 trains daily and has about 7,112 railway stations
  • The longest platform in the world is at Kharagpur and is 2,733 ft. in length
  • People Employed in Indian Railway are about 1.6 million which is world's 7th largest organization in terms of employees
  • Classes of travel on Indian Railway: Ist AC, 2nd AC, 3rd AC, AC Chair Car IInd sleeper & IInd ordinary

Budget 2016-17 Highlights

  • Targeted a Operation Ratio (operating expenses to revenue) of 92% owing to increase in the staff cost. 
  • To boost the investment, Railways has planned a total capital expenditure of INR 1,210 billion (US$ 18 billion), implementation through joint ventures with states, developing new frameworks for PPP, etc.
  • Planned a network expansion of 2,800 kms of track with a target of 7 kms per day and would increase to about 13 kms per day in 2017-18 and 19 kms per day in 2018-19
  • Railways will connect with all key ports, includign implementation of rail connectivity for the ports of Nargol and Hazira under PPP in 2016-17
  • WiFi is introduced in 100 stations and will be provided in 200 more stations
  • Launched new train service - For unreserved passengers (Antyodaya Express / Deen Dayalu coaches) and for reserved passengers (Humsafar / Tejas / Uday)
  • Planned to introduce hand-held terminals for sales of tickets, allow foreign debit / credit cards for e-ticket, bar coded tickets with access control
  • Introduce SMS based system to request 'Clean My Coach' in the train
  • Allow online booking of battery operated cars, porter services, and wheel-chairs
  • Will introduce optional travel insurance to passengers for rail journeys at the time of booking
  • Will integrate all facilities into two mobile apps dealing with ticketing issues and for receipt and redressal of complaints and suggestions
  • Planned to strengthen Mumbai Suburban Railway and Delhi Ring Railway service

High Speed Rail

Government of India has already planned to construct first passenger corridor from Ahmedabad to Mumbai with the assistance of the Government of Japan. The ministry will create Special Purpose Vehicle (SPV) - National High Speed Rail Corporation for implementing high speed projects. Feasibility study for the project is in advance stage and report is expected by mid of 2016.
 
Freight Business

Indian Railways is losing the freight business to road sector. The ministry has decided to undertake following initiatives to increase freight business:

  • To start time-tabled freight container, parcel and special commodity trains on a pilot basis
  • To open container sector to all traffic barring coal, specified mineral ores
  • To allow part-loads during the non-peak season
  • To undertake review of tariff policy to evolve a competitive rate structure vis a vis other modes
  • To permit multi-point loading/unloading and apply differentiated tariffs to increase utilization of alternate routes
  • To explore possibility of signing long term tariff contracts with key freight customers using pre-determined price escalation principles
  • To develop Rail side logistics parks and warehousing in PPP mode
  • To start first rail auto hub in Chennai

New Train Services

  • Antyodaya Express - unreserved, superfast service.
  • Humsafar - fully air-conditioned third AC service with an optional service for meals
  • Tejas - will showcase the future of train travel in India. Will operate at speeds of 130 kmph and above.Will offer onboard services such as entertainment, local cuisine, Wi-Fi, etc. through one service provider for ensuring accountability and improved customer satisfaction
  • UDAY - overnight double-decker, Utkrisht Double-Decker Air-conditioned Yatri Express on the busiest routes, has the potential to increase carrying capacity by almost 40%

It will be interesting to see that how the ministry will implement its key proposal and reinvent railways as the growth engine for the country.