Mumbai: The million dollar question on the eve of the Narendra Modi government’s maiden rail budget is how is the railway minister D.V. Sadananda Gowda going to raise funds for modernisation, expansion of the railways and security and safety on the rails. According to one estimate Rs 2.5 lakh crore to Rs 3 lakh crore would be needed for enhancing railway infrastructure.
The budget has to look at commuters who want a free lunch and those who don’t mind paying for efficient and upgraded services and safety. For instance running Mumbai’s awesome suburban services is a losing proposition though it carries almost half the number of commuters carried by the country’s entire railway system. It is said that the railways earns just 6-7 per cent of what it spends to run the suburban services. Maharashtra’s chief minister Prithviraj Chavan has already given his wish list that includes basics like raised platforms and better loos at stations.
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After the thunderbolt of a 14.25 per cent fare rise across the board, Mr Gowda had announced earlier, (a legacy of the Manmohan Singh government), and the subsequent roll back of some of the hike on suburban fares there is a lot of talk of going for 100 per cent foreign direct investment and exploring investments through public private partnerships.
The new rail minister, according to all and sundry is said to be for FDI for creating railway infrastructure. Mr Gowda is expected to provide a rail map of how he expects to attract funds both domestic and foreign direct investment and from multi lateral bodies like the World Bank and the Japan International Cooperation Agency. FDI is a double edged weapon. It is welcome if the foreign investors are going to set up factories in India for export of railway equipment as it would create jobs within the country, bring in technology and the money will remain within the country.
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Experts feel that India will not get a good deal with the multi lateral agencies. For instance in the case of the JICA it is said that 30 per cent of the total investment would have to go for sourcing equipment from Japan at whatever cost they sell. Or take the case of Siemens coaches: they are one third more expensive than what is made by India’s Integral Coach Factory.
Mr Gowda could also announce monetisation of railway land and letting out space at railway stations for commercial purposes to finance the upgrading of stations. The Prime Minister has said he would like railway stations to look like airports and this is a real tall order even by his standards.
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Another expectation is that Mr Gowda would announce measures to increase the number of commodities being carried by the railways to enhance freight revenue. The railways have lost out to road transport as its current market share is just 33 per cent. It is said he wants to add a total of 17 items like milk and sugar in addition to coal, iron ore, steel, cement and fertilisers that account for 95 per cent of the commodities carried presently. It also makes sense as it would reduce crude imports and cut the use of diesel by trucks that add to pollution.
