Modi-Engine Prabhu to Take Steam out of Sops
By Richa sharma | Published: 01st February 2015 06:14 AM |
NEW DELHI: Railways Minister Suresh Prabhu is most likely to skip the sop station. Handpicked by Prime Minister Narendra Modi, Prabhu, known for turning around the power sector during Atal Bihari Vajpayee’s tenure, is cautiously running to replicate the success in the Indian Railways. His financial prowess will be put to test when Prabhu presents his maiden Rail Budget on February 26.
Unlike former rail ministers Mamata Banerjee and Lalu Prasad who announced populist projects like Rs 850-crore new rail coach factory at Kanchrapara-Halisahar near Kolkata, Rs 262-crore electric and diesel engine components manufacturing unit in Dankuni in West Bengal and Gaya-Nalanda rail line project worth over Rs 550 crore in Bihar, Prabhu is expected to avoid populism and seek course correction in the budget to put the cash-strapped government transport behemoth back on track.
Railways spend 94 paise of every rupee earned, leaving six paise only as surplus. This surplus is continuously on decline due to non-revision of fare. The surplus, after paying obligatory dividend and lease charges, was Rs 11,754 crore in 2007-08 and is estimated to be Rs 602 crore in 2014-15. Railways got the highest even plan outlay of Rs 65,445 crore in 2014-15.
Prabhu, a Chartered Accountant, is well versed with the economic principles. It will reflect in the Rail Budget. According to a senior railways ministry official, the emphasis this time will be on generating extra revenue through innovative measures, improving basic amenities and services.
Prabhu is not expected to announce any new rail line project. There will be minimal new trains and no slash in passenger fare owing to a drop in the global fuel prices. Three elements—new projects, new trains and the fare are the soul of the Railway Budget. But the 2015 Rail Budget will be different as it would focus more upon completion on pending and ongoing projects.
There are nearly 380 pending projects worth Rs 2 lakh crore which were sanctioned in last 30 years. Majority of these projects, mainly new rail lines, were announced by Lalu and Mamata in their states Bihar and West Bengal—to please their constituency. In some cases, the state governments have not even allotted any land, and there has been no progress.
Prabhu, 61, who hails from coastal Konkan, has been given a green signal from the Prime Minister’s Office to announce tough measures in Rail Budget for course correction in Indian Railways, which reported a loss of Rs 30,000 crore in the passenger segment in 2014. The former environment minister was also appointed as Modi's 'sherpa' to assist him at the G20 summit in Brisbane last year. Before his appointment as rail minister, Prabhu was appointed head of a government panel on power revamp called Advisory Group for Integrated Development of Power, Coal and Renewable Energy by Modi.
And to take forward his task, Prabhu has already constituted a select committee comprising of top railways ministry officials to prioritise the pending projects on the basis of economic viability and necessity, as it is not possible to allocate funding for all 380 projects.
“One cannot drop non viable rail projects as it is a politically sensitive matter, especially with election scheduled in Bihar in 2015 and West Bengal in 2016. What we can do is allotting minimal funds for the least priority projects and put them in limbo,” said a ministry official.
The ministry has sought Rs 55,000 crore from the Finance Ministry as general budgetary support (GBS) and is expected to get Rs 37,000 crore. A good nearly Rs 20,000 crore is expected to be allocated for completion of pending projects, including 11 National Projects. Completion of the pending rail projects in the northeast states will be the key focus areas and priority will be given to National projects and strategic projects on the bordering states of the country.