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Business News/ Politics / Policy/  Full steam ahead
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Full steam ahead

Suresh Prabhu’s rail budget has the overdose of vision that has become characteristic of the Modi govt but it has the potential to be transformative

Railway minister Suresh Prabhu leaving Rail Bhavan for the Parliament to present the Union railway budget on Thursday. Photo: Ramesh Pathania/Mint (Ramesh Pathania/Mint)Premium
Railway minister Suresh Prabhu leaving Rail Bhavan for the Parliament to present the Union railway budget on Thursday. Photo: Ramesh Pathania/Mint
(Ramesh Pathania/Mint)

No new trains. No increase in passenger fares. Four goals. Five drivers. 11 thrust areas. That is the topline of the railway budget presented by Suresh Prabhu on Thursday.

It is the budget that has the potential to be transformational—by increasing capacity and improving technology on the supply side, by improving quality of service on the demand side, and by focusing on transparency and efficiency on the operational side.

For the first time, the consumer is a central focus—fundamental to raising fares in future, since consumers will not pay for bad service.

The rail budget envisages an investment plan of 8.5 trillion over the next five years, and this could well have a multiplier effect on everything from the fortunes of steel companies to the ability of the country to attract foreign interest in railways and boost the government’s ambitious Make in India programme.

Prabhu’s budget factors in a 52% increase in plan size, targets the best operating ratio in 9 years and, most importantly, broadly describes where it hopes to get the money from. Sure, a significant portion of the money will come from debt raised by new holding companies or by railways-owned companies but, at least on paper, this should be possible given the overwhelming interest in India at this point in time and the government’s larger imperative of ensuring the creation of a deep debt market if it wants to improve infrastructure and kickstart the investment cycle in the country.

Challenges remain—from executing a challenging and transformative plan to more mundane ones such as stopping the slide in the share of freight transported by rail—but this is a pretty good rail budget.

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Published: 26 Feb 2015, 03:08 PM IST
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