Those expecting a revolution from Prime Minister Narendra Modi's first platform to outline his vision for running the country may be in for a disappointment, but Sadananda Gowda's Rail Budget today provided enough hints as to the focus and direction Indian Railways will take under the new government.
Presenting the full Rail Budget in Parliament today, Gowda stayed away from any big-bang announcements, save for talking about the BJP's pet project -- a dedicated freight corridor connecting five cities -- and the decision to allow FDI, opting to choose continuity over disruptive change.
Other announcements were notoriously vague – a bullet train between Mumbai and Ahmedabad in Modi's home state Gujarat was announced but only Rs 100 crore was set aside for launching high-speed trains that are known to be cash guzzlers. (Even China has been struggling to make them profitable).
Then there were also the realities that every new government faces (which it does not when the party is in opposition) -- that in running such mammoth operations as, say, railways, it takes time to bring in change: in a worrying development, the operating ratio (or the money the government spends to earn every Rs 100) had worsened to about 94 percent in FY14, from 90 percent earlier.
All this meant the market -- which has been on steroids these past few months ever since Modi became the chief executive of the country -- did not hide its disappointment: at the time of writing, the Nifty had dropped a sharp 1.4 percent.
But despite that, the Modi government's intent was as clear as the announcements lacked clarity: that over the long term, the priority for railways is on three things: boosting the country's freight network, spurring private investment in the cash-starved operation and improving efficiency and transparency.
Right at the start of the Budget speech, Gowda announced he intends to make India the world's biggest freight network – a tall task considering Indian railways roughly carry one billion tonne freight in a year compared to China's four billion tonne.
But the announcement of a dedicated freight corridor showed the government intended to walk the talk.
The Budget also made all the right noises about spurring private investment in Railways. First there was the major announcement of allowing foreign direct investment (FDI) in all spheres except direct operations.
In a manner typical of what one would expect of a Modi government, the minister also laid out several small but innovative ideas to boost investment in railways: corporates would be encouraged to adopt railways stations and maintain them, infrastructure at railway stations would be revamped with the help of the public-private-partnership model, food courts at stations and ready-to-eat food from reputed brands will be introduced.
There was also a major announcement that railway land would be monetized to raise funds.
But experts said given the way accounts are maintained in the Indian Railways, the returns-oriented private sector would be not be very excited at the prospect of coming in.
Finally, in the area of improving efficiency, several ideas were proposed, which looked promising in scope.
Gowda listed several steps in this direction: restructuring the 'unwieldy' Railway Board (that runs the network), outsourcing cleaning services, focusing on online booking, introducing digital charts at stations, use of technology such as bringing in ERP management systems, etc.
But single-minded execution will remain the key to push each of these ideas to become actual successful projects.
PM Modi, ever the communicator, addressed the country via a live television link calling it a manifestation of the government's long-term vision of how his government will run the railways in a 21st-century India.
But the market, often guilty of being too focused on the short-term and the here and now, has chosen to pass at least for now.
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