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 Home > Analysis >
The Rail Budget 2011-12: An Update |
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The Rail Budget 2011-12: An Update
The Rail Budget was presented by Railway Minister, Mamata Banerjee on 25th February, 2011 in the midst of growing inflationary concerns and rising interest rates. She has opted for a populist budget, with an eye to the upcoming Assembly elections in West Bengal.
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| Highlights of the Budget |
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• No hike in passenger fares and freight rates
• Rs 57,630 crore plan outlay proposed for the Railways-Rs. 9,583 crore for new lines
• 1300 km of new lines, 867 km doubling of lines and 1017 km gauge conversion targeted in 2011-12
• 56 new Express Trains, 3 new Shatabdis and 9 new Duronto trains
• Introduction of AC Double Decker services on the Jaipur-Delhi and Ahmedabad-Mumbai routes, new Super AC Class on trains
• New portal for e-ticketing
• Booking charges reduced for both AC and non AC category
• Pan-India multi-purpose smart cards called 'Go India' on anvil
• 236 more stations to be upgraded to Adarsh Stations
• 47 additional suburban services for Mumbai and 50 new suburban services for Kolkata
• Two new passenger terminals in Kerala and one each in Uttar Pradesh and West Bengal
• Feasibility study on augmenting the speed of passenger trains to 160-200 kmph
• Special package of two new trains and two projects for the states running trains throughout the year without any disruptions
• Anti Collision Devices (ACD) to cover 8 zonal railways.
• GPS Based 'Fog Safe' Device to be introduced
• Unmanned level crossings numbering up to 3000 to be eliminated
• All India Security Help line on a single number to be started
• State capitals in the North-East, except Sikkim to be awarded rail connectivity within the next seven years
• Bridge Factory in Jammu and Kashmir and a state of the art Institute for Tunnel and Bridge Engineering at Jammu announced
• Diesel Locomotive Centre planned in Manipur
• A Centre of Excellence Center in Software at Darjeeling proposed under the aegis of CRIS
• Rail Industrial Parks at Jellingham and New Bongaigaon
• Additional mechanised laundry units coming up at Nagpur, Chandigarh and Bhopal
• A 700 MW gas-based power plant at Thakurli in Maharashtra
• 18,000 Wagons to be procured in 2011-12
• Socially desirable projects to be launched under the 'Pradhan Mantri Rail Vikas Yojana'
• 10,000 shelter units proposed for the track side dwellers in Mumbai, Sealdah, Siliguri and Tiruchirapalli on a pilot basis
• Concessions to physically handicapped persons to be extended on Rajdhani and Shatabdi also
• Concession of 50 per cent to all press correspondents, together with their families, have been increased to twice a year
• Senior Citizens concessions have been increased from 30 to 40 per cent
• Medical facilities to be extended to the dependent parents of Railway employees
• Scholarship for the girl child of Group-D rail employees increased to Rs 1200 per month
• 20 additional hostels to be set up for the children of railway employees
• 1.75 lakh vacancies belonging to Group 'C' and 'D', including the backlog of SC/ST posts and 16,000 posts in the ex-servicemen category to be filled by March 2011
• Separate sports cadre to be created
• 2011-12 declared the 'Year of Green Energy' for Railways
• Freight loading of 993 MT and passenger growth of 6.4 per cent expected for 2011-12
• Gross Traffic Receipts estimated to be Rs 1,06,239 crore
• Gross ordinary Working Expenses calculated at Rs 73,650 crore |
Issues to ponder over
The populist motive of the Rail Budget is evident, as sops have either been increased or kept intact. The Railway estimates their earnings to go up by around 16.5 % to Rs 30,456 crores, which can be achievable in the coming year, given the expected increase in the number of passengers, in the next year.
The financial health of the Railways is not in a good position given its high operating ratio of over 90 percent and this year the implementation of the Sixth Pay Commission recommendations have increased the expenditure of the Railways on staff and pension payments by about 97 percent as per Mamata Banerjee. To make matters worse neither passenger fares nor freight rates have been increased, this may severely constraint revenue generation.
Banerjee is also banking heavily on the success of her PPP projects to garner the funds required for the expansion of the Railways. But the success of these projects will depend on the speed with which the Railways treads the PPP path, and the extent to which their conditions are acceptable by the corporate.
The Railways plans to raise around Rs 20,954 crore from market borrowings in the form of tax-free bonds but that in itself is a challenge, given the high borrowing program of the government and the current liquidity situation in the economy. The question also arises as to how the government will service the interest payments of the borrowings undertaken, in the absence of any change in passenger fares and freight rates.
In all fairness, this Budget may be termed as a restrained one, which probably fell short of expectations.
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