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Speedy modernization can bring railways back on track again

Railways Minister Suresh Prabhu’s railway budget presentation will be tightrope walk

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Thomas George

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It's needless to say that Railways Minister Suresh Prabhu’s budget presentation was a tightrope walk, as there were high expectations around expansion and modernization of railways. It is indeed a difficult task to strike balance between the expenditures and the resources available with government to spend on these expansion and modernization plans.

As we know, the budgeted expenditure target for railways was Rs. 60,000cr this fiscal year, while the expenditure required for maintaining all assets, repairing faulty assets and replacing of old assets will require close to Rs. 1,20,000cr.

The funding could not be achieved by a mere increase in passenger fares or freight charges, as it would have started eating into the total revenue of the railways itself.

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Any marginal increase in the freight charges might have not been able to resolve the problem also, as the elasticity of freight charges has already been stretched to the maximum limit and any further increase might have pushed goods to be transported by other modes of transportation.

The increase in passenger fares was not an option as it might have pushed public to use other mode of travel like road, wherever it is possible.

While looking at the PPP routes to raise the incremental investment was certainly a handy option before the railways- but it has not worked well so far. During the current fiscal year, we have not been able to see much progress in this resource channel. A more aggressive public private sector partnership(PPP) in the key areas like Land, Laying tracks, Stations and Freight will certainly be a healing touch for the ailing mammoth.

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The best approach could be to take a long term view and with a phased out developmental milestones. Minister has rightly included all the key areas like signal system, tracks, moving stocks (like locomotives, coaches, wagons), stations and bridges etc. in his long terms vision of railway modernization plan.

Signalling systems modernization and a complete modernization of signals are something that will make our railways more efficient and safe for millions of passengers in the country, and hence needs to be implemented on an urgent basis.

But, the projects to add further to such humongous infrastructural assets will have a very long gestation period of 7-8 years- as it requires multiple sanction and clearance processes along with the infrastructure and geographical bottlenecks such as lack of bridge and tunnel etc. In today’s pace, 50 km of railway line can be laid in a year. So you can well imagine the time we would require to create a super-efficient nation-wide railway infrastructure.

The most important point is that if these are all done, railways can contribute at least 2.5 percent to the country's GDP, which again calls for investments to get it chugging or chug at faster pace.

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