Railway Budget 2011-12 Analysis

Presenting her third budget in her current term in the Lok Sabha on 25 February 2011, Railway Minister Mamata Banerjee proposed Annual Plan for the year 2011-12 at Rs 57630 cr which is the highest ever plan investment by the railways in a single year. Railway Minister Mamata Banerjee announced that there will be no hike in passenger fares. The Plan is proposed to be financed through GBS of Rs 20000 cr, diesel cess of Rs 1041 cr, internal resources of Rs 14219 cr, market borrowings of Rs 20594 cr through Indian Railway Finance Corporation (IRFC), considering its past excellent performance in the financial market. The budget highlighted the Railway Ministry’s intention to integrate suburban railway networks in large cities like Mumbai, bringing together the suburban, metro and other rail infrastructure under a single system for better performance.

Analysis of Railway Budget 2011-12 is as follows:

Mamata  Banerjee announced that there would be no hike in passenger fares. For the third time in a row in UPA II, Banerjee did not increase passenger fares and freight rates inspite of the Railways losing over Rs 15000 crore every year on their passenger business.

The budget proposed introduction of 135 pairs of new trains. The Opposition members as well as few members from the Congress opposed the budget proposal as they felt that she had done more for West Bengal at the expense of other States. Refuting the accusation Banerjee stated that new trains were given to other States, including Kerala and Gujarat, and a new project was proposed for Manipur.

For the first time ever, railways framed Vision 2020, providing a definite roadmap, both short-term and long-term, for the future.

The budget proposed to lay 40 new lines, covering 1075 km, double 867 km of track and undertake gauge conversion of 1017 km and electrification of 1000 km. All State capitals, except that of Sikkim, would get rail connectivity. A greater thrust was given to the expansion of the rail network with a larger allocation of Rs 9583 cr for new lines. The Railway Ministry proposed to complete 1,000 km of new lines in 2011-12.

The budget proposed to allocate Rs 9583 crore for 1300 km of new lines in 2011-12. The Ministry allocated Rs 5406 crore for doubling of 867 km of lines, and Rs 2470 crore for gauge conversion over 1017 km. Rs 13820 crore have been kept for purchase of coaches, locomotives and wagons. The move towards capacity building is worth is a plus for the Union Railway Budget 2011.

The Railway Budget 2011-12 appeared to be targeted more towards consolidation rather than venturing into newer territories though Banerjee did announce a couple of new ideas which the Railway Ministry intends to experiment with.

The electrical energy requirement of railways is growing rapidly with the expansion of the rail infrastructure and traffic. The Minister informed that 1000 MW at Nabinagar is at an advance stage of construction. Also it was informed that thermal power plant of 1320 MW capacity at Adra is in the process of being setting up. Depending upon the fuel being made available at economic cost, it was proposed to set up a 700 MW gas-based power plant at Thakurli in Maharashtra.

Railways’ had previously made efforts to provide dignity to the poor through the Izzat scheme of 2009-10. The Railway budget 2011-12 proposed to provide for small shelter through Sukhi Griha Scheme which would be taken up on pilot basis to provide 10,000 dwelling units at Mumbai, Sealdah, Siliguri, Tiruchirapalli and other places.

The budget proposed to create a fund to implement the socially desirable projects during the 12th Plan. Under the non-lapsable fund named Pradhan Mantri Rail Vikas Yojana the pending socially desirable lines would be completed and other similar new line projects would also be taken up.

A non-lapsable Fund for railway projects in the northeast region was created to boost the progress of projects in the region.

The budget announced Introduction of a pan-India, multi-purpose Go-India smart card on a pilot basis. This will be one single window package for the passenger to pay for tickets for long distance, suburban, metro etc.

The budget announced deployment of the introduction of Anti Collision Device (ACD) was introduced GPS based ‘Fog Safe’ device to handle the foggy weather without any untoward incident. The budget also proposed that whichever state ensures trouble-free train running for the whole year would be given two new trains and two projects as a special package.

Considering that Railway employees are the biggest asset and it is they who keep the Railways moving, a considerable number of schemes were announced for the welfare of the employees. Adopting Liberalized Active Retirement Scheme, increasing the scholarship for the girl child, extending medical facilities to both dependent father and mother of railway employees are few measures announced in the direction of employee benefit.

Railways are always environment friendly and are considered evergreen. It was pointed out that railways are the most fuel efficient mode of transport. Mamata Banerjee declared 2011-12 as the Year of Green Energy.

On the basis of freight traffic projection of 993 million tonnes and passenger growth of 6.4% over 2010-11, the Gross Traffic Receipts were estimated at Rs 106239 cr assuming a clearance of Rs 200 crore from traffic suspense.

To raise money, the Railways was allowed for the first time, to issue tax-free bonds to the tune of Rs.10000 crore in the next financial year, while they will get a fresh budgetary support of Rs.20,000 crore.