Rail Budget 2014: Foreign Direct Investment to fuel Modi train

Published Jul 9, 2014, 10:25 am IST
Updated Feb 23, 2016, 2:43 pm IST
No populist measures in Gowda’s maiden budget
Railway minister Sadananda Gowdaarrive at the parliament to present the Rail Budget (Photo: AP)
 Railway minister Sadananda Gowdaarrive at the parliament to present the Rail Budget (Photo: AP)

New Delhi: Having hiked fares recently to the tune of 14.2 per cent, railway minister D.V. Sadananda Gowda, presenting his maiden Railway Budget on Tuesday, promised a number of reforms, including foreign direct investment and more investments through public-private partnerships to boost the finances of the cash-strapped Indian Railways.

The first Rail Budget of the Narendra Modi government also stressed on better passenger amenities. The Modi stamp was evident as it proposed modernisation of the railways, with a bouquet of amenities: from cleanliness, better food, wi-fi networks in A1 and A2 grade stations and in select trains, besides “office on wheels” with workstations for business travellers and battery-operated carts for senior citizens and the disabled.

In the season of the “bitter pill”, both Mr Modi and Mr Gowda refused to play the populist card, to which the financial markets reacted badly, with the Sensex falling over 500 points. The railway minister, however, said his budget “seeks course correction in the light of mismanagement, apathy, populism in starting projects and severe fund crunch that have afflicted the railways over the years”.

Read: Rail Budget 2014: Centre proposes highest plan outlay for railways


The minister also proposed restructuring of the Railway Board, with induction of  professionals from private sector. Two proposed committees — Project Management Group and Project Monitoring and Coordination Group — at the level of Railway Board are being planned to overcome delays in project execution.

Unlike previous governments, which introduced several new trains in every budget (over 150 at times) to play to the gallery, the Modi government confined itself to just 54 new trains.

From the Opposition, the Congress attacked the Rail Budget as “capitalist”, the CPI(M) called it a “cosmetic exercise”, while the Trinamul Congres said it was “vision-less” and “anti-people”.

Read: Rail Budget 2014: Top priority to better facilities

Corporate India, however, welcomed the Rail Budget, saying the minister had tried to put the railways back on track and attempted a balance between commercial and social obligations. Commuters by and large expected a better standard of service as they are now expected to pay more. The fuel adjustment cost to absorb hikes in diesel prices will continue to be effective every six months, and this could lead to a marginal rise in passenger fares and freight charges periodically.

While the Ahmedabad-Mumbai bullet train is on the anvil, the budget unveiled the Diamond Quadrilateral Rail Project that will connect all metro cities with semi-high-speed trains. The Rail Budget also focused on the modernisation of stations, on the lines of airports, with the help of private players.

Read: Rail Budget 2014: Two high speed routes in South Central Railway zone

The railway minister said the Union Cabinet will soon take a decision on allowing FDI in the railways. Later, the Railway Board chairman said two foreign firms had shown interest in investing in two loco manufacturing units. Mr Gowda made a provision of Rs 100 crores for high-speed trains, and announced nine routes on which these would run to start with.

On safety and security, the budget proposed introduction of advanced technology for rail-flaw detection to check causes of accidents, while a significant amount has been kept for road-over and road-under bridges, and a pilot project will be launched on automatic door closing in mainline and suburban coaches.

Read: Rail Budget 2014: Milk, veggies to get special trains

If Mr Gowda claimed safety was his top priority, only Rs 1,785 crores has been allocated in the budget for road-under-bridges and road-over-bridges at unmanned rail crossings, which account for 44 per cent of deaths on rail tracks.

In order to make rail travel safer for women, the railways will recruit 4,000 women constables. Coaches for women will have a provision for escorts. Stress has been laid on cleanliness and efficient station management, and major stations will have foot-over-bridges, escalators and lifts.

To make railway management more efficient, the budget has proposed the setting up of a Railway University for training in both technical and non-technical subjects, as well as an Innovations and Incubation Centre to harness ideas generated from staff members.

Read: Rail Budget 2014: Tamil Nadu feels left out of grand schemes

After repeated complaints on serving substandard food, the railway minister proposed introduction of pre-cooked meals of reputed brands in a phased manner. He also unveiled a mechanism for third-party audit of catering services, that would lead to cancellation of contracts if the services were found below standard.

The minister said a major thrust will be given for connectivity in the Northeast, for which the Rail Budget has earmarked Rs 5,116 crores, that is 54 per cent more than the allocation in the previous year. He also unveiled plans for online wagon registration for better utilisation, besides salt wagon and those carrying milk.

He said 30 such projects had been chosen for completion in the current fiscal year. The annual plan for 2014-15 has been fixed at the highest-ever outlay of Rs 65,445 crores, with gross budgetary support at Rs 30,100 crores, a Railway Safety Fund of Rs 2,200 crores, internal resources of Rs 15,350 crores, external market borrowing at Rs 11,790 crores and funds through the PPP mode at Rs 6,005 crores.