Railway Minister Suresh Prabhu’s budget has little to commend itself. The good things are: there has been no hike in passenger fare unlike in previous budgets. Freight rate may be reduced. Special facilities are proposed to be offered to senior citizens. The Indian Railway’s gross reciepts for the current fiscal are slated to fall short of the budgeted target of Rs 1, 83, 578 crores by Rs 15,744 crores. The current slowdown has dented most goods and passenger earnings. Staff costs and pension outgo would increase by roughly Rs 28, 600 crores as a result of the adoption of the Seventh Pay Commission recommendations (SPC). A plan size of Rs 1, 21,000 crore has been estimated for 2016-2017. The bulk of it come from extra budgetary resources which consist of investments through special purpose vehicles/ joint ventures bringing finance from foreign pension funds, insurance companies and other outside sources. The IR work expenditure is estimated to be Rs 7, 660 crores next fiscal. It will be dificult to raise the money.
Prabhu is banking on cost cuts through lowering of diesel prices and increased electric traction. Power may be procured at competitive prices but will that be enough? Prabhu has focussed on a few major projects which should continue to grow. The proposed Dedicated Freight Corridor (DFC) will considerably reduce transit time for goods. Land acquisition is already underway. The corridor should be ready by 2019. These corridors will also increase the speed of passenger trains. New DFPs have also been proposed. By and large, neither a good nor a bad budget.