Accordingly, the new policy of the New Government aims at exploration of alternative means of resource mobilization including tapping Railways’ own public sector undertakings, partnerships with private firms, Foreign Direct Investments (FDI) and monetizing land assets. Besides emphasis on safety, it seeks prioritization and creation of time lines for completion of pending projects. It also aims at restructuring of Railway Board to separate its policy making and implementation roles. It also seeks to create Diamond Quadrilateral of high-speed trains, to begin with, on nine routes, connecting major metros and growth centres.

The Railway Budget also endeavours to continue with the predecessor UPA Government’s policies of opening up FDI in all aspects of Railways except operations, periodic revisions of rail fares linked to fuel and input costs, the launch of bullet trains, upgrading existing infrastructure to upgrade train speeds, monetization of land assets, development of stations through Public-Private-Partnership (PPP), and creation of Rail Tariff Authority to revise fares periodically.

In the light of the foregoing, a check of the ground reality of the private investments in the Railways right since 1993 with the Own Your Wagon Scheme and similar other schemes in different garbs introduced by the successive Governments have come a cropper. Given the penchant of private sectors to invest where there is quick returns in lesser time, the Railways being capital intensive with five to ten years of gestation time between investments and its fructification, the private investors are wary of investments in infrastructure of railways with faster depreciation in the form of corrosion, rusting and obsoletion of technology. For example, there was a mere 8 per cent private investment in the Railways during the 11th Five Year Plan ending March 2012. During the current 12th Five Year Plan’s first two years ending March 2014, out of a projected Rs. 1 lakh crore private participation in Indian Railways there has been no response from the private sector.

Given this background, the much-touted private investment in the proposed bullet trains and high-speed trains appears to be far fetched. The so-called PPP model most likely may work in logistic parks, commercial use of unutilized railway lands in major city growth centres, up gradation of stations on par with modern airports, container terminals, container cargos of high commodities, marketing of goods from rural and other untapped areas.

So far, private sectors have shown no interests in the development of Indian Railways. Even if, some multi national corporations come forward, the net consequences would be increased fair and freight rates, which may dilute largely the heretofore-professed policy of Indian Railways as a national transporter of strategic importance for common people with attendant social responsibility. It can, therefore, not operate as a mere commercial entity. It would have to be subsidized by the Government, as is the case world wide while maintaining a balance between the commercial viability and subsidized passenger services and essential commodities transportation.

The Railway Budget is high on rhetorics and low on reality. The need of the hour is to improve the existing rail infrastructure with enhanced safety, security and passenger amenities rather than think of tall orders. Track renewal of worth Rs. 40,000 crore is over due. The budget is in the direction of part corporatization of Indian Railways.

The harshness of the rail budget was already taken with hike in passenger fare by 14.2 per cent and freight by 6.5 percent to mop up about Rs. 8000 crore annually with roll back of Rs.650 crore hike in suburban rail fare. Nevertheless, annual plan outlay of Rs.65,445 crore has been provided. It estimates an increase in freight traffic by 4.9 per cent with a target of 1,101.25 million tones of freight traffic with an incremental of 51.07 million tones over 2013-14. It also envisages small growth in passenger traffic over 2013-14. Earnings from freight traffic is estimated at Rs.105,770 crore and from passenger traffic at Rs.44,645 crore. The operating ration (financial health) of railways is proposed to be improved by 1 per cent from 94 to 93.