Friday, March 29, 2024
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NDA flags off FDI, bullet train plan

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New Delhi: The Modi Government on Tuesday went in for a what it called a ‘course correction’ in its first Railway Budget, announcing plans for massive involvement of the private sector, including FDI, to modernise the world’s fourth largest rail network which carries 23 million passengers a day but had slowed down due to cash crunch.

Railway Minister Sadananda Gowada, who tabled the Budget in the Lok Sabha, did not announce any fare and freight hike as the government had already over a week before the start of the Budget session increased both by a hefty 14.2 per cent and 6.5 per cent respectively.

He,however, indicated future hikes depending on the increase in oil prices.

“Here, I point out that periodic revision in passenger fare and freight rates, as approved by this August House, will be linked to revisions in fuel prices in order to insulate the Railway revenue from fuel cost escalation,” Gowda said in his Budget speech.

Some of the highlights of the Budget,which proposes highest ever plan outlay of Rs 65,445 crore, were proposals for introducing a bullet train on Mumbai-Ahmedabad route and setting up a network of High Speed Rail connecting major metros and growth centers of the country with initial fund of Rs 100 crore for the purpose, which was described as quite insufficient by leader of the Opposition Congress in the House Mallikarjun Kharge.

Presenting his maiden budget for 2014-15 in the Lok Sabha, Railway Minister Sadananda Gowda said he plans to leverage railway PSU resources by bringing in their investible funds in infrastructure projects.

The pre-budget hike of 14.2 per cent on fares and 6.5 per cent on freight rates announced on June 19 will fetch Rs.8,000 crore, he said. The roll back of proposals on monthly season tickets would involve a sacrifice of Rs. 610 crore.

Gifting Prime Minister Narendra Modi’s home state Gujarat, he announced plans for introduction of a bullet train in Mumbai-Ahmedabad sector which will cost Rs.60,000 crore.

Gowda said the budget seeks course correction in the light of mismanagement, apathy, populism in starting projects and severe fund crunch that have inflicted the railways over the years.

In his post-budget briefing, Gowda said the railways would continue with the Fuel Adjustment Costs (FAC) formula under which there will be periodic hike in fares and freight rates once in six months.

He said faced with resource crunch the government proposed to attract private and foreign investment to tide over the situation.

“We need huge investment for running bullet train. There was a ban on FDI in railways. Now we would request Commerce Ministry to delete that clause so that there can be FDI in infrastructure development,” the minister said adding the Cabinet has to take a call.

Asked at his briefing as to what is the cap the railways would like on FDI, Railway Board Chairman Arunendra Kumar said “we would like it to be 100 per cent.”

For this, structural reforms will be introduced and resources will be mobilised through PSU surplus, FDI and PPP, he said amidst shouts from the opposition that “this is a budget of Ambanis and Adanis”.

“How long can I depend only on hiking fare and freight rates and burden the public to realise these funds?,” he told the house adding, “this is unrealistic. Thus, I need to explore the alternate means of resource mobilisation.”

Apart from leveraging railway PSUs to bring in investible surplus funds in infrastructure projects, Gowda his ministry is seeking Cabinet approval to allow FDI in rail sector except in operations.

Adopting the PPP route for raising resources, he said “it is our target that bulk of our future projects will be financed through PPP mode, including the high-speed rail which requires huge investments.”

Increased passenger amenities, more safety measures, timely completion of projects and increased financial discipline are among the highlights budget.

The budget proposes multi-pronged approach to make Railway journey safe and secure and comfortable for passengers.

More thrust has been placed on passenger amenities, cleanliness and efficient station management. Now all major stations will have foot-over bridges, escalator and lifts.

On safety and security, the budget has proposed introduction of advance technology for rail-flaw detection to check causes of accidents, a significant amount of Rs. 1,785 crore has been earmarked for building road-over and road-under bridges. (Agencies)

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