top of page

Have a nice journey! A dream rail budget

Unlike previous rail budgets, which was monotonous due to policy stagnation and drowsy due to lot of unrealistic promises and vote bank politics, the FY 15-16 rail budget presented by Mr.Suresh Prabhakar Prabhu, Honourable Minister of Indian Railways, was phenomenal, futuristic, outstanding and commendable due to its vision statement towards the sustainable and safe travelling to its fellow customers. The budget is a vision statement with lot of progressive thoughts and designed to expand the rail’s capacity substantially and to modernise the entire system. The budget is clearly aimed towards creating surplus funds from operations, not only to service its debts but also to make it financially self sustainable.

No Gimmicks ! No promises to get applauses!

No new trains were announced in the Railway Budget on Thursday by Railway Minister Suresh Prabhu who assured Parliament that these would be announced in the ongoing session itself, pending completion of track renewal work and review of line capacity. "At present, due to over-utilised line capacity and backlog in track renewals, there are speed restrictions which lead to delay in running more number of trains. " The review will be completed soon so that we can announce new trains and increase frequency in this session," he said. Government's proposal of not announcing new service, arguably the first time in decades, comes despite heightened demands from states as well as Members of Parliament for announcing new trains in the Budget. And that is a realistic and practical approach too.The aroma coming out of the said words about initiatives to improve the catering and fresh food services is promising a tasty future for an Incredible and Swaach Railways.

Development! Development! Development

The major attraction behind this vision statement is the policy which is adapted to modernise the entire system through proper fund allocation. The total investment plan for 2015-19 period is for Rs. 856020 Crores which is designed for Network Decongestion( Rs. 199320 Cr) Network Expansion( Rs 193000 Cr), National Projects (Rs. 39000 Cr), Safety (Rs.127000 Cr), Information technology and Research (Rs. 5000 Cr), Rolling Stock (Rs. 102000 Cr), Passenger Amenities (Rs. 12500 Cr), High Speed Rail and elevated corridor(Rs.65000 Cr), Station redevelopment and logistics Parks(Rs.100000 Cr) and others (Rs.13200 cr). This is one of the massive restructuring and modernisation initiatives in the history of Indian Railways. This is a big chuck of money and going directly on modernisation.

The Action plan

The budget is designed with eleven major thrust areas and giving its prime most importance to cleanliness, passenger safety, amenities & technology up gradations. The budget is path breaking in several new aspects and giving thrust to technology and surveillance systems. The budget has given due importance for improving the existing infrastructure and redevelopment of stations. The budget envisages capacity augmentation through network expansion , expansion of freight handling capacity , improving train speed, introducing bullet trains, upgrading manufacturing facilities etc.

Resource mobilisation

The plan budget up by 52% from Rs. 65,798 Cr to Rs1,00,11 Cr and the said funds will be mobilised by setting up an infrastructure fund for raising long term debt from domestic as well as international sources including multilateral and bilateral financial institutions . The major challenge in front of the Government is to raise the required fund for feeding the massive expansion cost.

An eye on Profitability & an ear on accountability.

The operating profit margin is the key to success of all business and it is very important to have a hold on the operational expenses to improvise the margins. The railway aims to improve the operating ratio to 88.5 percent during the next fiscal, the best in the last nine years and the same is a very welcome move. The operating ratio, a key measure of efficiency, was at 91.8 percent in 2014-15 after touching a high of 93.6 percent in the previous financial year. The lower the operating ratio, the better is the profitability of an entity. The budget is very authentic on transparency aspect and accountability factor and railways will not be able to deliver sustained improvement in operating efficiency unless changes are made to speed up decision making, tighten accountability, and improve management information systems. Those issues are proposed to be addressed well in the days to come.


This budget is literally a common man’s budget as the rail is always for common man of India. Arresting the corruption, shaving off the bureaucratic interference, raising the funds, executing the project on time all are the immediate hindrances before the Government and we have to keep our fingers crossed and hope for a beautiful tomorrow. In each and every sense the rail budget 2015-16 is a “Modi”fied budget and have a very strong vision and sense of development. The Journey has begun! Have a nice journey.


9 views0 comments
bottom of page