Saturday, February 25, 2006

INDIAN Railway Budget 2006-07

Indian Railway Minister Lalu Prasad Yadav today presented the Railway Budget of 2006-07, in parliament.

courtsy Indian Railways
15 points of Speech of Shri Lalu Prasad
Introducing the Railway Budget 2006-07

On 24th February 2006

1. Mr. Speaker Sir, I rise to present the Budget Estimates 2006-07 for the Indian Railways at a point in time when, there has been a historical turn around in the financial situation of the Indian Railways. Our fund balances have grown to Rs. 11,000 cr and our internal generation, before dividend has also reached a historic level of Rs. 11,000 cr. With this unprecedented achievement, we are striding to realize the Hon’ble Prime Minister’s dream of making Indian Railways the premier railway of the world. Sir, this is the same Indian Railways which, in 2001 had deferred dividend payment, whose fund balances had reduced to just Rs. 350 cr and about which experts had started saying that it is enmeshed a terminal debt trap. You might term this a miracle, but I was confident that :

“Mere zunu ka natija zaroor niklega,
isee siaah samandar se noor niklega.”

2. Sir, the whole nation can see today that track is the same, railwaymen are the same but the image of Indian Railways is aglow. This has been the result of the acumen, devotion and determination of lakhs of railwaymen. Sir, the general perception so far has been that Railways’ finances cannot be improved without increasing second class passenger fares. But my approach is entirely different. In my view, improvements can only be brought about by raising the quality of services, reducing unit costs and sharing the resultant gain with customers. Therefore, instead of following the beaten path, we decided to tread a new one.

“Hum bhi dariya hai, apnaa hunar hame maloom hai,
jis taraph bhi chal padenge, rastaa ban jayega.”

Financial turn around of Indian Railways

3. Sir, I take pride in informing this House that in the first nine months of the year 2005-06, the Railways’ output has been record breaking. The growth in freight loading is 10% and in freight revenues it is over 18%. Based on the trends up to now, the freight loading target is being increased from 635 mt to 668 mt and the goods revenues target from Rs. 33,480 cr to Rs. 36,490 cr. Thus, Railways would achieve incremental freight loading of 111 mt in two years itself, which will be 133% higher as compared to the incremental loading of 83 mt of entire Ninth Five Year Plan period. Tenth Plan targets of 624 mt loading and 396 billion tonne kilometers have been surpassed one year in advance. Sir, I not only hope but firmly believe that we would surpass the Tenth Five Year Plan’s incremental target of 63 billion tkm for freight business by over 200%.

4. According to Revised Estimates, Passenger Earnings, Other Coaching earnings and Sundry Other earnings are likely to register growths of 7%, 19% and 56%, respectively. Gross Traffic Revenues are expected to be Rs. 54,600 cr, which are higher as compared to the previous year and Budget Estimates of the current year by 16 % and 7%, respectively.

5. Ordinary Working Expenses are likely to increase by Rs. 1,200 cr, mainly due to post-budgetary increase in fuel prices. Lease charges paid for rolling stock taken on financial lease have till now been shown as operating expenditure, without segregating interest and principal repayment component. As mentioned in my speech last year, to bring in more transparency and better accounting practices, necessary changes in accounting system have been made to reflect expenditure on lease charges accordingly, with necessary approval. These changes in the accounting system have effected a reduction of Rs. 1,616 cr. in the operating expenses. Overall, Revised Estimate of Ordinary Working Expenses has been kept at Rs. 35,184 cr, which is Rs. 416 cr lesser as compared to the Budget Estimates. As a result of these changes in the accounting system, an improvement of around 3% is also reflected in the operating ratio.

6. According to the Revised Estimates of the current year, Indian Railways’ internal resources before dividend, would reach a historic level of Rs. 12,966 cr. Even after setting aside the effect of the accounting changes mentioned earlier, this amount would be Rs. 11,350 cr. Fund balances would be at a record level of Rs. 11,280 cr and the operating ratio is expected to improve to 83.7%.

Technological Upgradation and Modernisation

7. The technological upgradation in every field of Railway working will be given the utmost priority so that the reliability of services can be improved to gain customers’ confidence and also bring down the operating and maintenance costs.

8. Wagons are Railways’ revenue earning assets. While the Railways modernized their locomotives and coaches in nineties, wagons presently deployed still use the technology of the eighties. It is not possible to load our covered and open wagons beyond 64 tonnes, except with certain heavy commodities. RDSO is designing new high capacity wagons. Commodities like coal can be loaded up to 70 tonnes in these new wagons. Prototypes of these wagons will be developed in the coming year and trials will be completed. Regular production of the new wagons, with payload to tare weight ratio of even better than 3:1, will start from 2007-08. All possible efforts will be made to start manufacturing aluminum and stainless wagons also in 2006-07 to improve the payload to tare weight ratio.

9. Sir, while this is an important achievement, it is not enough. In the future we have to manufacture 25 tonne axle load wagons which can carry loads up to 80 tonnes and whose payload to tare weight ratio is around 4:1. We need to manufacture special wagons to increase Railways’ share in the transportation of commodities like motor vehicles, petrochemicals, etc. At present this technology is not available in our country. Therefore, transfer of technology will have to be encouraged for developing such wagons for which the Railways will provide the necessary policy framework.

Use of modern Signaling and Telecommunication Technology

10. The advanced railways of the world are extensively using modern signaling and telecommunication technology to enhance safety, streamline train operations and increase line capacity. Using such technologies is cost effective. I, therefore, have decided that modern signaling and telecommunication means will be used for improving safety and enhancing line capacity on trunk and main routes. A multi disciplinary team will be constituted for an in depth study of various advanced signaling and telecommunication alternatives. This team will submit its report within three months. After reviewing the report, a policy will be framed for deciding extensive use of these technologies.

Public Partnership and Public-Private Partnership Schemes

11. Today, when Indian Railways are scaling historic heights in freight and passenger business, we will not allow resource constraints to hamper expansion of rail network. We will encourage public partnerships and public-private partnership schemes for effecting significant improvements in rail services and development and expansion of rail network. To this end, a level playing field under a transparent policy will be provided to investors by further simplifying the policy of public-private partnership. This is the need of the hour :-

“Ek kadam hum badhe, ek kadam tum,
aao milkar naap de, phasle chand tak.”

Year of Passenger Service with a Smile : 2006

12. Sir, we have decided that the year 2006 shall be the year of Passenger Service with a smile

“Mun me bhav seva ka, hotho par muskan,
Behtar seva wazib daam, rail ki hogi yeh pehchan.”

Staff Welfare

13. Sir, with their continuous hard work 14 lakh railwaymen have effected a historic turn around in the financial position of the railways. In my New Year message to railway men I had assured them that to the extent possible their expectations would be met in the current year.

“Kaamgaaro ki lagan se, hai tarakki sabki,
hausla inka badhao, ki yeh kuchh aur baddhe.”

Proposals relating to freight rates & passenger fares.
Dynamic Pricing Policy

14. Sir, generally the public apprehends that fares and freight would increase in the Rail Budget. This apprehension has, however, been proved baseless in every Railway Budget presented by me. In my view the basic “mantra” for success in a competitive market is not increasing tariffs, but reaching the benefits of reduced costs to customers. I would like to express this in the following words :

“Aam admi hee hamara devta hai,
vah jeetega toh hum bhi jeet payenge,
tabhi toh yeh tay karke baithey hain,
faisle ab usi ke hak mein jaayenge.”

15. Sir, the excellent performance of railways has been possible only due to the able guidance provided by Hon’ble Prime Minister. He has always encouraged us and provided constructive assistance. On behalf of the entire railway family, I express my gratitude to him. I also thank all the railwaymen who, working as an excellent team, have completed the given tasks with dedication and devotion. I also profusely thank passengers and other railway users who have continuously cooperated with us and I hope that they would continue to do so in future also. 130. Sir, I consider myself fortunate for having the opportunity to serve the nation through the railway service. I would like to assure the House that we will be continuously striving to meet the expectations of public by constantly improving railway services. During discussions on the Railways, Hon’ble Members have always boosted our morale. While wishing that they continue to harbour these sentiments, I would like to say

‘Yeh inaayat nahin, mera vishwas hai,
daurey mehengai mein rail sasti rahe,
apnaa inaam humko to mill jayega,

rail par aapki sarparasti rahe.”


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