July 09, 2014
Kalaivaraikalai
Railway minister Sadananda Gowda used his budget on Tuesday
— the first major policy showcasing of the Modi government — to signal its
intention of using private sector investments, both domestic and foreign, as
the prime engine of growth and modernization. Having got rid of the difficult
part by hiking rail fares and freight charges late last month, Gowda could
focus his budget speech on the new government's vision for the Railways, and he
did just that.
READ ALSO : Modi sheds populism baggage from rail budget
The government's vision clearly has a major role for the private sector in everything from new projects and freight terminals to cleanliness and food on trains and at stations. As Gowda's speech made clear, "It is our target that bulk of our future projects will be financed through PPP (public-private partnership) route".
He argued that while hikes in fares and freight charges were necessary to sustain financial viability, it would be "unrealistic" to depend solely on such an approach to raise the resources needed for modernizing the prime national transporter. That's why, the minister said, his ministry was seeking Cabinet approval for allowing FDI in the sector.
READ ALSO : Govt to allow FDI in suburban rail corridors, stations
Gowda was at pains to point out that successive governments in the past had announced new projects with abandon — falling prey to the "nasha (intoxication) of claps — but had been lax in implementing them to the extent that some were pending for three decades. In contrast, he said, the focus now would be on prioritizing projects. In particular, doubling and trebling of lines to decongest major routes would get the nod ahead of new lines, which have typically been unviable.
In keeping with this line of shunning populism and in a radical departure from historical practice, the minister did not announce any new projects in his budget, though there were a slew of new trains (including those announced by the UPA in the interim rail budget) and extensions of existing ones. Gowda also castigated earlier governments for failing to raise passenger fares and thus creating a situation in which the loss per passenger kilometre had risen from 10 paise in 2000-01 to 23 paise in 2012-13.
READ ALSO: Railway finances hang by 6-paise thread
Describing the noughties as the "decade of golden dilemma - the dilemma of choosing between commercial viability and social viability", Gowda said while the Railways would continue to fufil social obligations, doing so beyond a point was "not possible without compromising on efficiency and safety".
Despite the pro-corporate and pro-reform tone of the rail budget, stock markets reacted adversely with the sensex shedding 518 points, its biggest single-day decline in 10 months. The slump was attributed by market analysts partly to the absence of details in the budget speech. Also, while corporates and markets are looking forward to greater fiscal discipline, there's a worry that a stricter watch on government spending could lower demand and hence hit growth.
READ ALSO: Sensex tanks 518 points on spending cut fears
The political opposition as well as the railway unions, not surprisingly, reacted sharply to the budget, with some dubbing it 'elitist' and others decrying the move to 'privatize' the railways.
The new-look railways, Gowda promised, would include a bullet train between Mumbai and Ahmedabad, high-speed trains on nine sectors, a greater focus on cleanliness and decent food and further improvements in the e-ticketing system. They would also see some stations being developed along the lines of the new airports through the PPP route.
READ ALSO: High-speed trains, push for new routes cheer Mumbai
Corporates will not just have a role to play in developing new freight terminals, they could also adopt stations and take care of their cleanliness and maintenance. NGOs and charitable institutions too could do so. CCTVs will be used to monitor cleanliness at stations.
Food courts at major stations, where regional cuisines would be available, and pre-cooked meals on board from reputed brands are among the promises on the catering front.
READ ALSO: Taste of India put on the fast track
Not only will tickets be available for booking online, the facility would also be extended to booking trains, coaches, or seats. Online booking of retiring rooms will be extended to all stations in 2014-15, the minister promised.
Business travellers will also, on some select trains, be able to use workstations for a fee. For the handicapped and elderly, the service of battery-operated carts will be extended to cover all major stations. Safety of women too found a mention, with the rail mantri saying 4,000 women RPF constables would be recruited towards this end. Also, "coaches for ladies will be escorted" and additional care would be taken of women travelling alone.
READ ALSO : Modi sheds populism baggage from rail budget
The government's vision clearly has a major role for the private sector in everything from new projects and freight terminals to cleanliness and food on trains and at stations. As Gowda's speech made clear, "It is our target that bulk of our future projects will be financed through PPP (public-private partnership) route".
He argued that while hikes in fares and freight charges were necessary to sustain financial viability, it would be "unrealistic" to depend solely on such an approach to raise the resources needed for modernizing the prime national transporter. That's why, the minister said, his ministry was seeking Cabinet approval for allowing FDI in the sector.
READ ALSO : Govt to allow FDI in suburban rail corridors, stations
Gowda was at pains to point out that successive governments in the past had announced new projects with abandon — falling prey to the "nasha (intoxication) of claps — but had been lax in implementing them to the extent that some were pending for three decades. In contrast, he said, the focus now would be on prioritizing projects. In particular, doubling and trebling of lines to decongest major routes would get the nod ahead of new lines, which have typically been unviable.
In keeping with this line of shunning populism and in a radical departure from historical practice, the minister did not announce any new projects in his budget, though there were a slew of new trains (including those announced by the UPA in the interim rail budget) and extensions of existing ones. Gowda also castigated earlier governments for failing to raise passenger fares and thus creating a situation in which the loss per passenger kilometre had risen from 10 paise in 2000-01 to 23 paise in 2012-13.
READ ALSO: Railway finances hang by 6-paise thread
Describing the noughties as the "decade of golden dilemma - the dilemma of choosing between commercial viability and social viability", Gowda said while the Railways would continue to fufil social obligations, doing so beyond a point was "not possible without compromising on efficiency and safety".
Despite the pro-corporate and pro-reform tone of the rail budget, stock markets reacted adversely with the sensex shedding 518 points, its biggest single-day decline in 10 months. The slump was attributed by market analysts partly to the absence of details in the budget speech. Also, while corporates and markets are looking forward to greater fiscal discipline, there's a worry that a stricter watch on government spending could lower demand and hence hit growth.
READ ALSO: Sensex tanks 518 points on spending cut fears
The political opposition as well as the railway unions, not surprisingly, reacted sharply to the budget, with some dubbing it 'elitist' and others decrying the move to 'privatize' the railways.
The new-look railways, Gowda promised, would include a bullet train between Mumbai and Ahmedabad, high-speed trains on nine sectors, a greater focus on cleanliness and decent food and further improvements in the e-ticketing system. They would also see some stations being developed along the lines of the new airports through the PPP route.
READ ALSO: High-speed trains, push for new routes cheer Mumbai
Corporates will not just have a role to play in developing new freight terminals, they could also adopt stations and take care of their cleanliness and maintenance. NGOs and charitable institutions too could do so. CCTVs will be used to monitor cleanliness at stations.
Food courts at major stations, where regional cuisines would be available, and pre-cooked meals on board from reputed brands are among the promises on the catering front.
READ ALSO: Taste of India put on the fast track
Not only will tickets be available for booking online, the facility would also be extended to booking trains, coaches, or seats. Online booking of retiring rooms will be extended to all stations in 2014-15, the minister promised.
Business travellers will also, on some select trains, be able to use workstations for a fee. For the handicapped and elderly, the service of battery-operated carts will be extended to cover all major stations. Safety of women too found a mention, with the rail mantri saying 4,000 women RPF constables would be recruited towards this end. Also, "coaches for ladies will be escorted" and additional care would be taken of women travelling alone.
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