Sadananda Gowda Asks Cabinet to Allow FDI to Revamp Railways

Railway Projects, in NE, as of October 26, 2013
Photo: Business Standard

[Editor: The Railway minister's budget lacks vision and maturity. Moreover, his decision to start, Bullet Trains in the Mumbai--Ahmedabad route, is totally lopsided and devoid of any reasoning, when there are already more than 57-trains. The Bullet Trains should have been ideal for the Mumbai--Pune route (or at least Kolkata--Jamshedpur route) where many people come from Pune to work in Mumbai (Bombay), On the other hand though Assam sent one of the highest number of BJP MPs, in 2014 elections, nothing much came into its kitty. 

Moreover, the railway minister is silent on the  on the much-delayed Lumding-Silchar broad gauge project of North-east Frontier Railway (NFR) in Assam which has so far (in the last 15-plus years) made only 80% progress and the much-waited mega block in the 201-km section will be taken up from October 1, 2014. The project started in 20th Century and now we are already 13 years past in 21st Century, but no one knows when this project would get completed. The suffers are basically, the people of South Assam, Tripura, Mizoram and South Manipur, apart from the people of North Cachar Hills. The markets have rightly gave it a Thumbs Down, to such substandard budget. Therefore, don't expect much from Arun Jaitleys' Union Budget which is coming on 10th July, 2014. Till now NDA Government has survived only on hype, nothing came much on the table, except the bold decision to hike railway fares. At end I would like to lament that: "Whoever is sent to Delhi, he / she turns out to be "Shakuni Mama" (Mahabharata)"]

New Delhi, July 08, 2014: Railway Minister Sadananda Gowda, presenting the Narendra Modi government's first Rail Budget today, promised to seek increased foreign and domestic private investment to fund modernization of the country's huge but badly stretched network. 

The Railways need an "immediate course correction" after years of mismanagement, Mr  Gowda told Parliament as he outlined ambitious plans for the network that carries 23 million people daily. He did not raise passenger fares again, but defended a recent and unpopular fare hike of 14.2 per cent recently, saying, "The medicine appears bitter in the beginning, but is like nectar in the end." That revision, he said, would bring in additional revenue of about Rs. 8000 crore.

In a post-budget briefing, he also said that the Railways would continue with a Fuel Adjustment Cost formula under which there would be periodic hikes in fares and freight rates once in six months.

He announced a slew of passenger-focused measures - including proposing India's first bullet train to run on the Mumbai-Ahmedabad sector and 50 other new trains, several of them high speed. He promised cleaner, safer trains and stations and better food. 

He also promised Wi-Fi on trains and easier ticket booking - 7200 e-bookings per minute.

Prime Minister Narendra Modi said Mr Gowda's budget "shows it's planned for the railways as a whole, not piecemeal planning as was done till now. It is not an ad hoc budget. It shows where we want the Railways to head and also where we want the country to head through the Railways."

Mr Gowda's main emphasis today was on making the Railways profitable. "I can also get many claps from this house,  by announcing many new projects but that would be rendering injustice to the struggling organization," Mr Gowda said, adding that of every rupee earned, the Railways spends 94 paise, leaving only six paise. "This surplus, apart from being meager, is continuously on decline due to non-revision of fare." (Hungry Kya? Better Food on Trains, Promises Rail Minister)

Only government funding, the minister said, was insufficient and so, he was seeking the union cabinet's approval for allowing foreign direct investment or FDI in the industry.

He also sought greater private participation and exhorted corporates to adopt stations. The bulk of future projects would be public-private partnership or PPP funded, he said, emphasizing on the need to prioritise and complete projects, adopt safety standards of international level and encourage development.

He said he aimed to make the Railways the biggest freight carrier in the world, but said at present its share of total freight in the country had declined to only 31 per cent.

Mr Gowda, famous for his smiling countenance, did not smile much today as he accused previous governments of running the Railways for political benefit; more than half the projects worth lakhs of crores announced in the last 30 years had not been completed, he said, as new announcements were made every year. 

Courtesy: NDTV Ltd