Rail Minister unveils Financial Austerity Drive to better Rail Finances

‘3-pronged strategy’ of Railways will include an austerity drive to improve finances. Suresh Prabhu also said the government will put in place a new mechanism for revising passenger fares and freight rates

New Delhi: Dismissing the Opposition charge that the Railway Budget has nothing for the poor, railway minister Suresh Prabhu on Wednesday said the centre of his budget is common man and he is working on a three-pronged strategy to improve the financial health of the public transporter.

The minister, while replying to discussion on the Railway Budget, said a mechanism would be put in place to revise passenger fares and freight charges.

Among other things the minister said the Mumbai-Ahmedabad Bullet train would be built under the self-financing mode and would significantly helping upgrading the technology in the railways.

“The Rail Budget has everything for common man…Common man is the centre of the budget,” he said. The initiatives intended to benefit the common man include e-ticketing, catering on demand, bio-toilets, food for infants, better stations, etc.,” the minister added.

Moreover, the weaker sections including members of SC and ST would be given preference while awarding contracts for setting up stalls at railway stations.

The Lower House later passed the appropriation bills and the demands for grants in connection with the Railway budget for 2016-17, after a debate that witnessed participation of over 100 members.

Mr Prabhu said his three-pronged strategy would help in “significantly” improving the financial health of the railways and make it a “precious asset of the nation”.

The strategy to revive the railways include augmentation of services, generation of more revenue and optimisation of cost.

Elaborating on the strategy, the minister said he proposed to launch an “austerity drive” to reduce administrative expenses.

“Whenever you raise fare, there are more questions raised than the fare rise. Therefore, we are trying to create a new mechanism whereby there will be a proper system that will be put in place (for revising fares), Prabhu said while replying to the debate on Railway Budget in the Lok Sabha.

Suresh Prabhu in his Indian Railways Budget 2016 has not increased either passenger fares or freight charges.

He said the budget has taken several steps to reform the railway system.

There are many other important information in the Budget which talks about reforming the system itself. One is the project and the other is reforming the system itself, he said.

The Railway Regulatory Authority which is likely to be rechristened as Railway Development Authority and would undertake various developmental activities besides fixing freight rates and passenger fares.

An independent rail regulator has been recommended by most committees that have looked into railway reforms for over a decade.

Prabhu has already set the ball rolling to have a regulatory mechanism into reality and has suggested that the regulator’s functions should include laying down the framework for monitoring of passenger and freight tariffs, Public Private Partnership projects and efficiency.

“Therefore, we are also trying to structure the Railway Board on a business line forming cross sectoral directorate and it is something on which we are also working. We are also working on planning and investment organisation,” Prabhu said in the House.

He further said railways is trying to set up a holding company for the Railway PSUs creating a separate organisation called Special Railway Establishment for Strategic Technology and Holistic Advancement (SRESTHA) for research and development. We are also creating an organisation or a Special Unit for Transportation Research and Analytics (SUTRA) for data analytics, making sure for 25 tonne axle load which will increase the speed and other things will also happen.

“All these things will in turn bring in structural reforms and structural changes in the Railways,” he said.

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