Railways gets Rs 65,837 crore; focus on passenger comfort, stress on PPP model

Railways received a budgetary allocation of Rs 65,837 crore and highest ever outlay for capital expenditure amounting to Rs 1.60 lakh crore in  the Budget for the year 2019-20 presented on Friday, which includes a whopping 200 per cent increase in funds for passenger amenities. Last year, the outlay for the railways was Rs 1.48 lakh crore while the Budget allocation was Rs 55,088 crore. In the interim Budget, the allocation was Rs 1.58 lakh crore.

In the 2019-20 Budget, funds of Rs 7,255 crore have been allocated for construction of new lines, Rs 2,200 crore for gauge conversion, Rs 700 crore for doubling, Rs 6,114.82 crore for rolling stock and Rs 1,750 crore for signalling and telecom. The allocations have remained the same as in the interim budget presented in February.

“This is a budget for 130 crore Indians, rich or poor, for entrepreneurs, for the industry, promoting new work and opportunities,” said Railway Minister Piyush Goyal.

The allocation for rail passenger comfort this fiscal has gone up to Rs 3,422.57 crore from Rs 1,657 crore in the Budget presented last year by then finance minister Arun Jaitley. In the 2017-2018 financial year, the budgetary allocation for railway passenger amenities was Rs 1,100.90 crore. Indication of the sharp rise was given in the interim Budget in which the allocation for passenger amenities jumped by 50 per cent from the amount allocated in 2018-2019.

Finance Minister Nirmala Sitharaman, while presenting the Budget, said the railway infrastructure would need an investment of Rs 50 lakh crores between 2018 and 2030 and proposed that a public private partnership (PPP) be used to unleash faster development and delivery of passenger freight services for railway projects to boost connectivity.

“Railways will be encouraged to invest in suburban railways through special purpose vehicles (SPVs) and enhance metro rail network through PPPs,” she said.

Government envisions using rivers for cargo transportation, which will also decongest roads and railways, Sitharaman said.

Goyal said the Rs 50 lakh crore investment in railways that the Finance Minister talked about was needed to modernise stations and build passenger amenities like toilets, waiting rooms and better stations.

“We have drawn up an whole programme. Some of the old projects like 100 per cent electrification, advanced signalling, station development was already there. Now, we have to worked out how to create additional capacities, so that our modal share of freight can go up, the cost of logistics start coming down and our passengers along with good amenities get more and more avenues to travel by trains to reach their preferred destination.

“All this will entail more doubling, tripling, new dedicated freight corridors, some semi high speed freight corridors, very large gamut of investments in different sectors, regional connectivity, connectivity to aspirational districts. We have worked this out both through government expenditure and through public-private partnership,” he said.

Sitharaman in her speech said that given the capital expenditure outlays of the railways are around Rs 1.5 to Rs 1.6 lakh crores per annum, completing even all sanctioned projects would take decades. She proposed the use of PPP model to unleash faster development and completion of tracks, rolling stock manufacturing and delivery of passenger freight services.

“Wherever there are opportunities and viability of attracting more investments and better services for the passengers, we will keep an open mind. The passengers have a right to better services. We are open to it.

“If there are economically viable projects and people are willing to invest in them, then, why not. For example, if Coal India opened a new mine and they need a railway line and a siding. Why should railways invest in it? Coal India need it to move their coal, so they can invest in it. We can co-invest in them. Whenever there are opportunities which are viable we should have an open mind,” she said.

Railway stations modernisation will also be launched this year, she added.

However, what will remain the Railways’ major headache would be its revenue expenditure which includes an estimated salary payout of Rs 86,554.31 crore, about Rs 14,000 crore more than last year.

The Budget estimates also allocated Rs 267.64 crore for Nirbhaya Fund, including provision of Rs 250 crore for Integrated Emergency Response Management System (IERM) (Video Surveillance System), and Rs 17.64 crore for Konkan Railway Corporation Ltd.

Estimates under Gross Traffic Receipts for the year 2019-20 have been placed at Rs 2,16,675 crore, an increase of Rs 19,961 crore over the revised estimates 2018-19. The railway minister also said that the national transporter will invest in creating metro coaches and stock, showing confidence in its manufacturing units, which have produced state of the art coaches like in Train18 and is in the process of manufacturing Train20.

“We are not selling off government assets. Everybody’s jobs will be protected. Like we have IRCON, RITES, they are all corporatised government companies,” he said, amidst disquiet in its production units about the railways’ proposal to hive them off as one corporate entity.

In fact the Budget allocation for rolling stock has increased from Rs 3,724.93 crore in 2018-2019 to Rs 6,114.82 in 2019-2020 - which was announced in the interim Budget.