Appreciating the Railway Budget presented today by Hon’ble Mr Dinesh Trivedi, Railway Minister, the Confederation of Indian Industry (CII) stated that it is a bold and pragmatic Budget and meets the needs of the country over the longer term.
“The Rail Budget is largely in alignment with CII’s pre-Budget recommendations, and is a good balancing act, given the fund constraints. The five-point agenda outlined in the Budget along with focus on bringing down operating ratio through greater efficiency would go a long way in infusing the necessary momentum to rail infrastructure upgradation,” said Mr Chandrajit Banerjee, Director General, CII.
The five-point agenda relates to safety, consolidation, modernization, capacity augmentation and decongestion, and reduction of operating ratio. The Indian Railway system, the second largest in the world, is the lifeline of the nation’s economy and a vital infrastructure sector.
The increase in passenger rail fares after several years is prudent and will help rationalize the revenue stream of the Indian Railways, added the CII press release. Moreover, the Minister also stated that an independent body would be set up for examining the freight and passenger fares balance, so that dependence on freight is reduced. According to CII, this would bring comfort to industry for goods movement which subsidises passenger routes.
CII had called for greater private sector participation in the rail sector in order to meet the requirement of Rs 14,00,000 crores as envisaged in the Vision 2020 document of the Railway Ministry. The announcement of a new Member, Railway Board, for public private partnership (PPP) is welcome as it would help bring in guidelines to attract private investments, stated CII. The Budget also announced a Station Development Corporation that would leverage the PPP route for establishing and modernizing stations.
The Budget proposed various projects such as new lines, electrification of routes, and more rolling stock facilities. The doubling of budget funds allocated for signaling will help impart greater efficiency and safety to traffic, said the CII press release. CII had also proposed various technological and safety related upgradations for zero-tolerance approach to safety, including Train Protection and Warning System, train control technology and traffic management systems. The announcement of an independent safety regulatory authority was welcomed by CII as a key step going forward.
The Rail Budget has taken decisive initiatives for institutionalizing systems, stressed CII in its statement. Specialised bodies have been introduced for stations, safety, tariff regulation, high-speed rail, and related functions such as housekeeping, design and R&D. The Minister has also signaled the key imperative of efficiency by stating his intent to lower operating ratio from 95% to 84.9% in 2012-13, and further to below 75% by end of the 12th Plan.
CII was also happy that border rail infrastructure has been given high importance in the Rail Budget. This is in accordance with its priority for greater economic cooperation with neighboring countries. The link between Agartala and Akura in Bangladesh would reinforce people-to-people connectivity of the two countries.
CII hoped that proposed measures would facilitate greater private sector participation in this vital infrastructure sector through improved project implementation, streamlined and time-bound approval processes and favorable terms for reasonable returns on capital and more efficient vendor management as well as equitable sharing of project risks.
New Delhi
14th March 2012