Gowdas Railway Budget is a holding operation, for dreams cost money Gowdas speech can broadly be divided into two parts - a holding operation to stop the drift of the last 10 years; and a big-vision part that will need policy changes to materialise. Railway Minister Sadananda Gowdas 2014-15 budget, which was pre-empted by fare and freight hikes last month, has three big messages to offer: consolidation, limited populism, and expansion largely with private investment. The big vision ideas - bullet trains and a diamond quadrilateral of high- speed rail networks - have been outlined, but their execution is likely to stretch over years, and will substantially depend on foreign investment. The key policy change is thus the proposal to allow foreign direct investment (FDI) in railway projects and an expansion of public-private partnerships (PPPs) to new areas. The first bullet train proposal - between Mumbai and Ahmedabad - could cost all of Rs 60,000 crore and which will need a completely new set of tracks can clearly not be funded without foreign participation. The diamond quadrilateral will need track upgradation to raise train speeds to 160-200 kmph, but even this will call for massive foreign and private investment. It can be taken up in phases - and the process has been begun in this budget with some nine sectors receiving the green signal. Gowdas speech can broadly be divided into two parts - a holding operation to stop the drift of the last 10 years; and a big-vision part that will need policy changes to materialise. The first part of his speech thus focused on a diagnosis of the railways ills, followed by some tentative short-term remedies, and ending with some dream items for the future. It is actually a responsible budget without too many populist flashes, and one has to wait for his second budget in February 2015 for the recommended policy changes to start moving the railway system towards the future. Diagnosis: Gowda essentially said that past railway ministers were fooling the public by announcing new projects without intending to finish them. Keeping passenger fares low effectively ensured that the railways lost freight business. Justifying the 14.2 percent fare hike..
Posted on: Wed, 09 Jul 2014 03:49:35 +0000
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