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India’s rail budget promises new business model to fund expansion

February 24, 2010

Railway Minister Mamata Banerjee Wednesday presented India’s rail budget for the next fiscal with the promise of a new business model to encourage private investment along with social commitment but without privatisation.

“Our objective is inclusive growth,” she told the Lok Sabha, lower house of parliament, adding that her main consideration in this year’s budget was social responsibility rather than mere commercial viability of projects.

“We have set our goals in the Vision 2020 document and we will achieve it,” the minister said, referring to the document unveiled in December that has targeted making over 30,000 km of routes into double or multiple lines against 18,000 km today.

“It is a fact that administrative and procedural delays discourage potential investors. We will need to overcome this. I am setting up a special task force for this,” she said.

“Special structure will be created for the new business model,” she said. “But we will not privatise our railways. Indian Railways will remain with the government.”

At the same time, she also asked the private sector to refrain from what she called “typical negative approach” while dealing with the Indian Railways. “I am sorry to say this, this mindset has to change.”

Prime Minister Manmohan Singh, United Progressive Alliance (UPA) chairperson Sonia Gandhi, Leader of Opposition Sushma Swaraj and Finance Minister Pranab Mukherjee were among those in the house, presided over by Speaker Meira Kumar.

This was Banerjee’s fourth budget of her career as railway minister and the second for the United Progressive Alliance (UPA) government in its second straight term after being voted back to office in May last year.

According to Banerjee, 117 out of the 122 new trains promised in her last budget will be flagged off by March 31, within a matter of seven months, which was a commendable effort.

Seeking to give safety issues due consideration, the minister said there were a few cases of unfortunate accidents in the past and said these would be prevented by adopting the highest level of technology and manpower training.

“Within five years, we will have 13,000 out of unmanned level crossings manned – 3,000 this fiscal and 1,000 in the coming fiscal,” she said, referring to the high number of accidents at such crossroads.

The budget came against the backdrop of the share of Indian Railways in the movement of goods, vis a vis truckers, falling from 24.07 percent in 2001-02 to 20.89 percent in 2008-09 and further to 19.32 percent in the first 10 months of this fiscal.

Indian Railways runs the world’s second largest network under a single management with a network of 64,099 route km to ferry 18.9 million passengers on 7,000 trains daily from 6,906 stations. It also runs 4,000 freight trains to carry 850 million tonnes of cargo.

Some of the highlights of her budget include:

— Special drive to increase passenger amenities

— Upgradation of 94 stations

— Six new drinking water bottling plants in public-private partnership (PPP) mode

— Modern toilets at railway stations

— More ticketing centres to help the public

— Acquisition of cutting edge safety technology

— 1,000 route km to be created

— Special task force for clearing investment proposals in 100 days

— New business model to be created

— No privatisation

— Railways to remain with government

— But greater participation of private sector assured

— 117 of 120 new trains for current fiscal to be flagged off

— Within five years, all unmanned level crossings to be manned

— Construction of more underpasses, besides road overbridges

— Greater coordination with state governments to protect railway property

— Security of women passengers to be improved

— Ex-servicemen to be employed in Railway Protection Force

— Five sports academies to be set up

— Astroturf to be provided for development of hockey

— Employment opportunities for sports persons

— Railways to be lead partner for Commonwealth Games

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