‘Suresh Prabhu’s Rail Budget is pragmatic, technocratic and people-centric’

The Rail Budget 2016-17 presented in the Lok Sabha by Minister for Railways Shri Suresh Prabhu can be described as a pragmatic, technocratic and a people-centric budget. Minister Prabhu in his characteristic demeanour and in line with a radical departure from Rail Budgets of the past seemed to focus on four broad themes in his budget.

First was the focus on processes. It included an overall theme and ways and means to achieve those challenges being faced by railways. The budget aimed to provide an overarching framework for 'reorganising, restructuring and rejuvenating' Indian Railways. It is expected to be achieved through 'new revenues, new norms and new structures'. 'New revenues' are to be generated not through conventional methods like increasing tariffs but through newer ways of income generation through monetization of assets of the railways. 'Newer norms' mean improvement in procurement processes and reexamining existing expenses to ensure optimal productivity. In 'newer structures' the budget mentioned the need to look at 4c's of solving issues- namely co-operation, collaboration, creativity and communication. In short there seemed to be a massive reorientation of the way in which the railway budgets have been traditionally looked at by the union government.

The second broad area of the Railway Budget 2016-17 seems to be its customer-centric approach. The budget starts with making travel comfortable, introducing better e-ticketing facilities both offline and online with enhanced capacity for ticketing increasing from 2000 tickets per minute to 7200 tickets per minute. Another crucial area has been social initiatives like online booking for Braille enabled coaches and increased quota at the lower berth for senior citizens and women, which are seen to be customer-friendly measures. Other steps for customer centricity include 'Clean my Coach' service through SMS and invitation to FM radio stations for introducing entertainment services in rail coaches. Also, Janani sewa to help provide children's menu on trains, baby foods and hot milk is seen as a customer centric measure. Another positive is the introduction of the term Sahayak for porters with an aim to impart them with soft skills necessary for a better experience for customers.

The third major issue was in context to infrastructure, partnerships and a collaborative approach to infrastructure improvement. There is in place a cabinet approval for JV's with State Governments on infrastructure expansion and growth. 17 state governments have consented and 6 MOU's have been signed with state governments. Apart from this works covering 53,000 km and close to ₹90,000 crores have been proposed in the budget documents. Also, over the long term, the budget seems to focus on building three dedicated freight corridors. Besides it also talks about projects for port connectivity and works in various parts of India like northeast and Jammu and Kashmir that are already underway. The hi speed rail corridor between Ahmedabad and Mumbai is also set to take off with the registration of SPV in the coming month. Also, the initiatives for Wi- Fi enablement in 400 more stations in the coming year is another positive step which shows the resolve of the government for services around core infrastructural development.

Fourth, another major area seems to relate to the financial aspect of the budget. The budget appears to be balanced with the revenue shortfall in the revised estimates being neutralised by savings of approximately ₹ 9000 crore. Over the long term, the need is to improve revenues from the non-rail sources which are around 5-6 times in other parts as compared to India. In India, the revenues from non-rail sources are close to 5 percent of total revenues. It needs, to be tapped for revenue growth over the long term. Revenue generation is targeted for 2016-17 at ₹ 1,84,820 Crore which is a considerable rise from the revised year's figure. The CAPEX for 2016-17 is pegged at ₹ 1.21 lakh which is to be financed through joint ventures and new frameworks for PPP, etc.

The Railway budget has focussed on innovative ways to finance and cut down expenditure. Amidst the constraints, it wants to do best for India with the existing resources at hand. Creation of institutions like the Rail University will go a long way for the future improvement in the functioning of the railways. It is hoped that this pragmatic and technocratic thinking sees quick implementation on the ground.

(The article is co-authored with Sankalp Sharma, Senior Researcher at the Institute for Competitiveness, India. Amit Kapoor is Chair, Institute for Competitiveness & Editor of Thinkers. The views expressed are personal. Amit can be reached at amit.kapoor@competitiveness.in and tweets @kautiliya)