Business

Prabhu’s Promise: Pay the Same for a Better Journey While the Railways Makes More Money

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More amenities on track? Credit: Shome Basu/The Wire

The presentation of the Union and Railways budgets in India have always tended to be big events — unlike most other countries where budgets are relatively predictable affairs. On Thursday, Union railway minister Suresh Prabhu stepped up to deliver his second railway budget.

Devoid of any sensational surprises or largely unimplementable ideas, this year’s railway budget tries to be pragmatic and passenger-friendly while refusing to bite the fare-hike  bullet that some have suggested is necessary. Here’s a quick summary, divided into different sections, on what you need to know.

The Big Dope

  1. There will be no change in passenger fares or freight rates.
  2. The Railways, however, plans to double investment to Rs. 1.2 lakh crore for the next financial year. According to Prabhu, the government is looking at waysof  boosting cost optimisation this fiscal. Some of this optimisation has already been realised: a saving of Rs. 8,720 crore would be recorded this year.
  3. The ministry expects the railways to record revenue growth of 10.1 per cent in the coming financial year.
  4. Rather than increasing the number of trains per sector or line, the new budget plans for three new categories of train services and one new coach category.
  5. New locomotive factories will be set up with an order book of Rs. 40,000 crore.
  6. All unmanned crossings will be eliminated by 2020.
  7. States in North-East India, specifically Manipur and Mizoram, will be connected through broad gauge soon.
Freight wagons. Credit: Shome Basu

Freight wagons. Credit: Shome Basu/The Wire

Money, money?

Where is the funding for this going to come from? While Prabhu has announced that the Life Insurance Corporation (LIC) has agreed to invest Rs. 1.5 lakh crore to fund various railway projects, he seems to be betting on increasing non-fare revenue sources. For the Indian Railways, the amount of revenue that comes in from the sale of tickets or freight-specific sources is over 95% of total revenue. The government is looking at increasing revenue from non-fare sources (currently at less than 5%) to the world average of 10% over the next five years. They plan on doing this by:

  1. Revamping the parcel business: The railways wants to crack into the courier, express and parcel market. To this end, they plan to expand the services they offer to growing sectors such as e-commerce; even going to the extent of initiating a pilot project for online booking of parcels.
  2. Monetizing user data: The Railways, Prabhu announced, “collects data pertaining to passenger preferences, ticketing patterns, commodity flows, train running and information on various services and operations”. This data will be monetized, perhaps by selling it to advertisers, while still protecting user privacy
  3. Monetising Land: There are huge tracts of land that are available next to most railway stations and next to large portions of the rail network. The government plans on leasing out these spaces to people who wish to build solar plants and horticulture and tree plantations.

New trains, new coaches

As we mentioned briefly above, the rail ministry plans on bringing out new types of trains and coaches. Some of these come with the BJP branding that we have seen in other government initiatives. They are:

1) The Antyodaya Express: A superfast train service that will be operated on dense routes, meant specifically for long-distance and unreserved passengers.

2) The Tejas: This is supposedly meant to showcase the best of the Indian Railways. It will operate at speeds of 130 kilometres per hour, and will have entertainment screens, on-board Wi Fi and top-notch catering services.

3) Deen Dayalu coaches: Meant specifically for unreserved passengers, these coaches will be added in some long-distance trains in order to enhance carrying capacity for the common passenger. These coaches will have potable drinking water availability as well as a “higher number of mobile charging points”.

4) Humsafar Express: This train will be a fully air conditioned third AC service with an optional meal service.

The quirky, the digital and the freebies

No budget, however, is complete without those small details and initiatives that are meant to delight but usually don’t pan out; either because the ideas themselves are silly or because they end up requiring too much maintenance.  This time around the railway budget comes with suggestions and planned projects that are substantial and probably dead on arrival. We list a few of them here for you:

  1. Sale of tickets will soon commence through hand-held terminals at stations to help out suburban and short-distance travellers. The idea is that this can be rolled out with minimal infrastructure investment.
  2. See a dirty coach or bathroom? A mobile-SMS service will soon be launched that will allow you to report and request for cleaning
  3. Baby food, hot milk and hot water will be made available at certain railway stations.
  4. Trains will soon be fitted with LED-lit boards for advertising and come equipped with public announcement systems. GPS-based digital displays will also be fitted inside coaches in order to provide real-time information on upcoming halts.
  5. The government wants to invite FM radio stations to provide entertainment on trains by installing their own public announcement systems on specific trains.
  6. Free Wi-Fi will be available at over 100 railway stations by the end of this year. This was announced earlier and will be mostly done through a partnership with Google.