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Rail Budget 2016 at a glance; Key takeaways!

The Railway Budget For 2016-17 Today Spared Passengers And Goods Movement From Any Increase In Tariffs While It Announced Introduction Of Three New Superfast Trains And Creation Of Dedicated North-south, East-west And East Coast Freight Corridors By 2019.

PTI | Updated on: 25 Feb 2016, 03:19:57 PM

New Delhi :

The Railway Budget for 2016-17 today spared passengers and goods movement from any increase in tariffs while it announced introduction of three new superfast trains and creation of dedicated north-south, east-west and east coast freight corridors by 2019.

Presenting his second Budget in the Lok Sabha, Railway Minister Suresh Prabhu promised rationalising of the tariff structure by undertaking a review to evolve competitive rates vis-a-vis other modes of transport and to expand the freight basket as a means of additional revenue mobilisation.

Unlike last year when he tweaked freight rates, Prabhu made no changes either in passenger fares or freight rates.

The three new superfast trains announced by him include ‘Humsafar’ which will be a fully air-conditioned 3AC service with option of meals. ‘Tejas’ will showcase the future of train travel in India with speeds up to 130 km per hour with onboard services such as entertainment, local cuisine and wifi.

The two trains will ensure cost recovery through tariff and non-tariff measures while ‘Uday’ will be an overnight double-decker along with ‘Utkrishit’ double-decker air-conditioned yatri express on the busiest routes.

For improving quality of travel for unreserved passenger, a superfast ‘Antyodya’ express service would be introduced.  ‘Deen Dayalu’ unreserved coaches with portable water and higher number of mobile charging points would also be introduced.

He also announced setting up of a Rail Development Authority to enable fair pricing of services, promote competition, protect customer interest and determine efficiency standards. The draft Bill in this regard will be ready after holding extensive stakeholder consultations.

Outlining the Budget estimates for the coming year, the Minister put the plan size at Rs 1.21 lakh crore.

The focus will be on capital expenditure with a mix of various sources of funding in order to ensure the projects are given assured funding.


Introduction of three select train services -Humsafar, Tejas and UDAY- for reserved passengers was one of the highlights of the Railway Budget 2016-17 presented by Railway Minister Suresh Prabhu today.

Humsafar would be fully air conditioned third A C service with an optional service for meals.

Tejas on the other hand would showcase the future of train travel in India. Operating at speeds of 130 kmph and above, it will offer onboard services such as entertainment, local cuisine and wi-fi through service providers, while ensuring accountability and improved customer satisfaction.

Humsafar and Tejas will ensure cost-recovery by way of tariff and non-tariff measures.

Railways will also introduce overnight double-decker

Utkrisht Double Decker Air-Conditioned Yatri (UDAY) Express on the busiest routes, which has the potential to increase carrying capacity by almost 40 per cent.

For the unreserved passenger, the Railway Minister announced Antyodaya Express and Deen Dayalyu coaches.

Antyodaya Express would be long distance, fully unreserved, superfast train service for the common man to be operated on dense routes.

Prabhu said Railways would also add two to four Deen Dayalyu coaches in some long distance trains for unreserved travel to enhance the carrying capacity for the people.

These coaches will also have facility for potable drinking water and a higher number of mobile charging points.

“Every customer is our brand ambassador, the very reason of our existence. Therefore, each time that he or she travels, the satisfaction quotient must go up”, he said at the outset before announcing the services.

He also said government would continue to provide better passenger services making railway journey enjoyable and strive hard to ensure satisfaction of each of 7 billion passengers that ride Indian Railways network annually.

Railways’ revenue from passenger fares as well as freight rates is expected to fall short of the Budget target by Rs 15,744 crore in the current fiscal.

While it had budgeted to earn over Rs 1.83 lakh crore in 2015-16, as per the revised estimates it is going to earn about Rs 1.67 lakh crore.

Railways Minister Suresh Prabhu attributed the shortfall to tepid economic growth due to global slowdown.

“Historically declining model share of Indian Railways, which dropped from 62 per cent in 1980 to 36 per cent in 2012, is continuing to exert pressure on the institution,” Prabhu said presenting the Rail Budget for 2016-17.

Indian Railways has budgeted to earn from fares and freight Rs 1.84 lakh crore, which is about 10 per cent increase over the revised estimated for the current fiscal, ending on March 31.

For 2015-16, earnings from passengers fares are expected to be Rs 45,376 crore, as against the budgeted Rs 50,175 crore. Hence a shortfall of Rs 4,798 crore.

As regards earnings from goods, the figure in revised estimates came down to over Rs 1.11 lakh crore, from budgeted over Rs 1.21 lakh crore. The shortfall is Rs 9,570 crore.

Shortfall from other earnings in the current fiscal is put at about Rs 1,300 crore.

For the next year with an optimistic outlook for the economy, Prabhu said “we hope to generate revenues of the order of Rs 1.84 lakh crore, 10.1 per cent higher than the revised target for the current year”.

Indian Railways will borrow Rs 20,000 crore from markets through its two companies IRFC and Rail Vikas Nigam Ltd for capital expenditure during 2016-17, a whopping 69 per cent rise over the current fiscal year’s revised estimate.

Market borrowing, as per the revised estimate for current fiscal, has been pegged at about Rs 11,848 crore, lower than Rs 17,655 crore estimated earlier, according to the Railway Budget for 2016-17, which was tabled by Railway Minister Suresh Prabhu in Parliament today.

Indian Railways Finance Corporation (IRFC) will raise Rs 19,760 crore in 2016-17 for investment in rolling stock and projects, while RVNL plans to raise Rs 240 crore.

During 2015-16, IRFC raised Rs 11,591.66 crore while RVNL mopped up Rs 255.90 crore from the market as per the revised estimate.

Besides, Railways is expecting investment through various partnership to the tune of Rs 18,340 crore.

“With great pleasure I wish to inform the House that bankable railway projects are now assured of funding and should be completed within the next 3-4 years,” Prabhu said in while presenting the Rail Budget.

“We have introduced a new way of funding our projects through institutional financing. LIC has agreed to invest Rs 1.5 lakh crore over five years on extremely favourable terms.  We are also looking forward to setting up a Fund with multilateral assistance for financing railway projects,” he said.

Railways is expecting to mobilise Rs 20,985 crore from institutional and multi-lateral funding agencies.

Commenting on Rail Budget, Finance Secretary Ratan P Watal said increased capital spending good for Railways and Railway Budget has significant plan outlay.

“Whatever we had given in the current year, they have used it,” Watal said.

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First Published : 25 Feb 2016, 02:16:00 PM