Railway Minister Suresh Prabhu has given a no-tariff hike budget without compromising on the capital expenditure for increasing carrying capacity, both passengers and freight even in a challenging economic environment marked by a severe slowdown in the commodity sectors, which are lifeline of the Railways’ earnings, ASSOCHAM President, Sunil Kanoria said.
While committing himself to improving the Railways in terms of better passenger amenities and adopting a service-provider approach to the industry, which is the main revenue customer for it, Prabhu has lived up to his reputation of being a financial wizard in banking on non-budget resources for funding the capital plans. He knows it too well, there are limited options through the Gross Budgetary Support.
Though there have been slippages in the revenue target in the current fiscal, it has got more to do with the overall economic slowdown, more so in sectors like coal, steel, iron ore etc which have been worst hit but have been the major revenue sources for the Railways. If every other sector of the economy and every other company is reporting tepid growth in earnings, the Railways cannot be expected to be an exception. In view of the continuing challenges, the 10 per cent growth projections on revenue targets of Rs 1,848.20 billion is realistic, although he is banking on revival of growth in the key sectors.
Likewise, the Plan allocation of Rs 1.21 lakh crore is laudable and given the fact that he is focusing on several innovative ways of funding, there is no reason to suspect he would not succeed. The project implementation would remain a key. The best thing is that he is willing to challenge the age old notion as if it is only through tariff hike that the organisation as important as the Railways can be turned around. Efficiency and out-of-box approach can work, and he is depending on the same, the Assocham president said.
Increased involvement of the private sector both for the passenger amenities like upgrading of stations and freight movement is a welcome sign and he is following a business like approach in moving towards the medium term targets of providing reservation on trains on demand and giving A rated service to the freight customers. Besides, the plan to diversify his revenue source, other than the present narrow basket of a few commodities is timely.
Railways ‘focus on upgrading sub-urban transportation system in Mumbai, Delhi, Kolkata, Bengaluru and other cities should be whole-heartedly supported. At the same, we would urge Finance Minister Arun Jaitley to give full backing to the Railways since it can be a great vehicle for reviving investment in infrastructure that will result in ease of doing business and travelling for the common people.