Indian Railway Budget 2012-13 - Promising and Non-Populist

The honorable Minister for Railways Sri. Dinesh Trivedi presented his maiden Railway Budget today on March 14th 2012. This budget was expected to be a landmark one, mainly because of the Railways' enormous fiscal deficit of and industry watchers and everyone else were watching keenly on what the Minister would do to address this. For this reason, the possibility of a fare hike loomed large. The Railways hadn't raised fares for the past 8 years mainly due to the UPA's populist agendas, but as we saw in the recent elections that no longer pays off. The Railways were expected to raise fares to prevent it from becoming another basket case like Air India. I believe a fare hike would be justified, as we need the Railways to keep running for the sake of the country. The other rumors that were afloat were:

But anyways there was not much of hopes for many new projects given the Railways is short of cash. And as usual, many parts of the country did not expect much as for years the Railway Budgets presented catered majorly to the North and Eastern states of the country. But it gave hope with Dinesh Trivedi announcing that the "Railways should be like Gold" Anyway, let us see what ther goodies were there in Trivedi's goodie-bag and who all got them.

The Indian Railway Budget 2012-13

The minister started off with paying "tribute" to previous railway minister Lalu Prasad Yadav and his boss and previous RM, Mamta Banerjee. Then he came out with the projects, plans and highlights of the budget. He repeatedly emphasized on safety of the Railways and said that there will be zero tolerance for safety, for wich several missions and commissions were announced. He also announced an independent committee for modernization and resource generation, headed by Sam Pitroda. He also said that the Railways will not be able to complete projects without financial help from the center. Some highlights thereafter were

  • His order of concentration will be: 1. Safety; 2. Consolidation; 3. Capacity Enhancement; 4. Modernization of the system; 5. Reduction of Operating Ratio
  • A huge sum of Rs.14 Lakh Crore will be required to run the Railways for the next year, and he gave two options for meeting this, one to keep a Status Quo or, to Bite the Bullet and bring a generational change. He said he would Bit the Bullet, and needed was National Investment.
  • The budget for this year would be 60,000 Crores and he outlaid the budgetary resources which included highest ever planned investment market borrowing of 50,000 cr.

New Projects and Initiatives (Some are too ambitious)

  • Track and signalling systems would be upgraded on 19,000 km track length which represents 80% of the carrying volume, and the goal would be to run passenger services at 160 kmph.
  • 725 km of new lines have been completed this year at an expense of Rs.6700 Crore.
  • New Electric and Diesel locos, more LHB coaches, more freight wagons, double-decker passenger and freight trains...
  • Indian Railway Stations Development Corporation to modernize Railway Stations on the line of Airports!
  • Coaching Terminals at Kottayam, Nemom, Mau etc. which was announced last year and a coaching terminal and museum in Naihati in the name of Bankim Chandra Chattopadhyay.
  • All non-heritage lines would be converted to Broad Gauge, Mumbai region will be converted to be AC till Pune and the Kashmir Valley Line will be electrified, which will be part of 6,500 km electrification all over the country.
  • Pan-India connectivity from Navi Mumbai, 14 new surveys for lines.
  • State Government participation is encouraged, and special consideration will be given to such projects.
  • Results of PPP have not been encouraging. Private investors will be made stakeholders and part of planning process
  • Coaching factories in Odisha, Palakkad in Kerala, Kolar in Karnataka, Kutch in Gujarat among others and a Diesel Loco Ancillary unit manufacturing center in Vidisha, MP.
  • Pilot project for accommodating Waitlisted passengers on alternate trains on the same route, 929 new Adarsh stations, Wireless Satellite train running information for all trains via SMS etc.
  • Specialized house keeping body to be set up. Standards of cleanliness and hygiene to go up in the next six months.
  • Nine High Speed Railway lines for running passenger services of 230-250 kmph are being planned, in addition to the Kerala Government initiative.
  • Corrosion to due shit on the tracks costs the Railways a lot. The conventional open discharge toilets will be replaced by Green toilets/vacuum toilets on 2500 trains.
  • New Rail Neer plants at Palur in TN and Ambernath in Maharashtra
  • 75 new Express Trains, 8 new MEMUs, 9 new DEMUs, 21 new Passenger trains. 820 new "items".
  • No new stoppages on existing routes. #WIN
  • Organizational restructuring of the Railways along corporate levels.
  • A slew of new Suburban trains for Kolkata (Metro), Mumbai and Chennai.

The All Important Question - The Railway Fare Increase

The minister was throwing subtle hints at a rate increase throughout his speech. Finally, he admitted that he was forced to increase the fares but would not go for any steep hike though that was the recommendation. There would be an Individual Railway Tariff Regulatory Authority set up for recommendations for a fare hike, and the hike would be put into effect only after the authority submits its report and debate in the house. The minister's recommendations were a marginal 2 paisa per km for Suburban and Ordinary, 3 Paisa for Mail/Express trains, 5 paisa for Sleeper, 10 paisa for AC CC, AC 3 Tier and First Class, 20 paisa for AC 2 Tier and 30 paisa for AC 1st Class. Also, platform tickets will cost Rs.5 and fares will be rounded off to the nearest multiple of 5.

New Trains, Lines, Frequency Increase, Extensions, projects etc.

Ah, the goodies. Though there were 75 new trains announced, this does not include even one Rajdhani, Shadabdi or Jan Shadabdi and only one Garib Rath. Most of the new and frequency increased trains are long distance weeklies, which means that the Railways are just making optimum use of the extra rakes lying around. Though mostly a frugal budget, the highlight has to be the new Chennai - Bangalore AC Double Decker Express that has been announced. And God only knows when all these, especially the Durontos will start running. I am presuming that the "AC Expresses" mentioned in the list are Durontos. And some of the trains are totally unimaginative, but as I said, rake utilization. This also reflects in the increase in frequency and extensions. It is no surprise that most of the new trains, doubling and electrification, new lines and all other projects are for West Bengal, Bihar, Jharkhand and Rajasthan. The most neglected state, as it always has been, remains Kerala with one new (weekly) train, one frequency increase and one and a half MEMUs. I wonder when Railway ministers stop thinking of themselves as ministers for their own states.

Get the List of new Trains, Frequency Increase, Extensions, Gauge Conversion, Doubling, Electrification, New Lines etc here

Analysis of the Railway Budget 2012-13 and Aftermath

The budget was frugal in terms of goodies and over-ambitious projects, but seemed to have direction and purpose for a well laid out plan for the development and modernization of the Railways. The plans and proposals are no-nonsense and there are no over-ambitious projects save the high-speed rail dream. The biggest highlight of the budget was of course the fare increase, though nominal, was a necessary and important step towards increasing the fortunes of the Railways. The budget also had some important projects and programs that were directed to be immensely beneficial in the long run. Though it sounded hollow and was devoid of tasty morsels, the budget seemed to show promise, and the Ministry was desperate to carry through modernization and safety augmentation procedures, which was all hanging on the fare hike. In fact, the entire speech was wrapped around the fare hike, meant to lead up to it. I believe the future of the Railways might hang on this on thing.

But it is though unfortunate that politicians have started to play the populist card and demanding withdrawal in fare-hike to gain rabble-rousing support. The price rise HAS to be sustained, we Indians cannot afford to continue to be freeloaders for ever, at least for our country's sake. How are we supposed to keep the railways running with the nominal charges that are being paid now? Where will the money come from? The heavens? Where will the government get money to run it? Everyone wants everything free. This Socialist mindset has kept us poor for 60 years, and has to be done away with.Instead of teaching ignorant Mango People to be responsible citizens, our narrow minded leaders are still doling out freebies and pushing them to be ignorant forever. If this goes on, the country will be out of cash very soon. And the Railways will become another Air India. And who in the Railways' most favored states take tickets and travel anyway?

Entire Budget Speech (PDF)

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