NEW DELHI: The sharp fall in global crude oil prices paved way for Railway Minister Suresh Prabhu to go ahead with huge capital expenditure plans for the world’s fourth largest railway network on Thursday.
The savings incurred because of reduced subsidy towards oil and gas sector has given Prabhu enough room to boost infrastructure spending.
Prabhu has, in his maiden budget, shunned populism and focused on fiscal consolidation to improve financial health of the country’s largest public transporter. He refrained from announcing new trains, stated to be a first by any rail minister in the past three decades, focused on bringing down operating ratio and increased freight rates to rake in more money. Passengers were spared from any fare hike and there was a 67 per cent jump for improving passenger amenities.
Prabhu said his rail budget is not about satisfying political allies, but improving fiscal health of the public behemoth and passenger amenities. He did not announce any new train as has been the practice by previous rail ministers to fulfill political obligation. The railways will now focus on completing 360 pending projects.
The ministry intends to tap low- cost, long-term funds from insurance and pension funds, multi-lateral and bi-lateral agencies which can be serviced through incremental revenues.
The railway minister announced his market borrowing plan of Rs 17,655 crore for capital expenditure with the help of Indian Railways Finance Corporation and Rail Vikas Nigam Limited.
Interestingly, during his speech in Parliament that lasted a little over an hour, the Opposition was silent, save a couple of occasions. One such case was when Prabhu appealed to members to spend MPLADs to improve passenger amenities. Prabhu invoked Mahatma Gandhi, Vivekananda, Madan Mohan Malviya and Vinoba Bhave at regular intervals. “I have not increased passenger fares. We are directing our efforts to make travel on Indian railways a happy experience with a mix of various initiatives,” Prabhu said as he laid out four goals, five drivers and 11 major thrust areas for the Indian Railways in the coming financial year.
The budget also revised the commodity classification and distance slabs for carriage of commodities, which can raise freight rates upto 10 per cent for some of the items and will be effective from April 1, a move that could increase the commodities’ prices.
The Budget is largely in line with Prime Minister Narendra Modi’s projects. For instance, more toilets at railway stations and bio-toilets in trains goes with Swachh Bharat, while modern ticket facility for unreserved class goes with the Digital India initiative.