Rail Budget 2016-17

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Modis Stamp Evident

Whats In It For Stakeholders
Bulk Transporters

90

1 No across-the-board

`1.26 L Cr

freight increase

NEW PROJECTS
involving a total
investment of

400

STATIONS
to be
developed
through PPP

policy to evolve a
competitive
rate structure

Tender for 50 MW solar plants at

rooftop, another 100 MW in works

corridors

of windmill
power plants in

2016-17

Train sets
for
Rajdhani
and
Shatabdi
services

Current
procurement
to be

increased

by 30%

4 Railways to look

beyond bulk items

The Railways

5 Higher average speed

of freight trains,
50 km/hour

6 New delivery models,

Roll-on/Roll-off in
works

7 Time-tabled freight

container, parcel and

special commodity
trains on a pilot basis

8 Possibility of signing
long-term tariff
contracts

9 Container sector would

be opened to all traffic
barring coal
10
0 10 goods sheds to
be developed
11 Indias first rail auto
hub in Chennai for
automobile traffic

12
2 More port connectivity
projects

13
3 Rail side logistics parks
and warehousing

14
4 Key Customer

Managers to liaison
with major freight
stakeholders

PM SPEAKS

132.5 MW

USE OF
TRACK FOR
GENERATING
SOLAR
ENERGY

2 Review of tariff

3 3 more freight

is starkly apparent in Suresh Prabhus Railway Budget

MANY OPPORTUNITIES

Investors

BIG BENEFICIARIES AS
RAILWAYS LOOKS TO
CAPTURE LOST BUSINESS

NAMO MAGIC The Prime Minister Narendra Modis imprint

RESTRUCTURING MOVES AHEAD

Draft Bill
on
regulator
to be
finalised

Restructuring Railway
Board on
business
lines

Railway
Planning &
Investment
Organisation

Holding
company
for
Railway
PSUs

Suppliers
& Service
Providers

WiFi services at

100 stations

New-Age Stakeholders PERKS GALORE

The IRCTC
website
also offers
opportunities
for exploiting
ecommerce

Lease out land

along tracks
to promote
horticulture
and tree
plantation

Overhaul of
Parcel business
to help
ecommerce
sectors

RAILWAY DATA
COULD BE
MADE
AVAILABLE
FOR USE

in current year

Advertising
potential of stations,
trains and land
adjacent to
tracks outside
of big
stations

`50 crore

for innovation
grants to
employees,
startups and
growth
oriented small
businesses

Annual
innovation
challenge

INNOVATION LABS TO BE SET UP IN WORKSHOPS AND PRODUCTION UNITS

IN FOCUS

Team ET

uring his budget speech on Thursday,

railways minister Suresh Prabhu said,
This budget owes its inspiration to
the vision and leadership of our Prime
Minister Shri Narendra Modi ji. Officials say
he was certainly not exaggerating.
Modi was having regular meetings with
Suresh Prabhu and his team that was working on the railway budget, sources at Rail
Bhavan told ET. And that guidelines to the
ministry were clear: the budget had to reflect
the concerns, priorities and programmes of
the government.
Stung by criticism that the BJP government
was anti-poor, pro-business and suit-boot ki
sarkaar, Modis message was that the budget
had to reflect the aspirations of the common
citizens of the country, said a railway official
who requested not to be identified.
No fare hike, passenger is the king, women
in the forefront, healthy balance sheet, railways as an attractive investment option, employment generation, and economic growth
were all part of the PMs wish list. Also, the pet
schemes of the government had to find place in
the budget, sources said.

It was a tall order but railways had to fill in

the blanks, said a senior government official
who was part of some of the meetings. It was a
tough balancing act, which I must say Prabhu
has achieved.
While the focus of the budget was on passengers and improving amenities for them,
the minister included all key governments
schemes in the budget.
Prabhu mentioned two locomotive factories
being built in Madhepura and Marhowra in
Bihar with GE and Alstom to highlight the success of the governments Make
in India initiative. With an orThe budget
der book of `40,000 crore, these
mentioned
two are the biggest projects unDigital India
several times der the scheme.
The budget also mentioned
with Prabhu
Digital India several times
introducing
with Prabhu introducing sevseveral eeral e-services, including caservices,
tering. He said that application
including
of track management system
catering
(TMS) that had been launched
and inventory management
module of TMS had resulted in inventory
reduction by 27,000 MT, resulting in saving
of `64 crore and scrap identification of 22,000
MT equivalent to `53 crore.
Swachh Bharat was included as Clean My
Coach service where passengers can ask for
their coach to be cleaned through an SMS.

How Post-its Helped in Making Rail Budget

Suresh Prabhu went
through at least 100 drafts
before he finalised his crucial budget speech. A stickler for perfection, he and
his small team that worked on the budget
burnt the midnight oil as they went
through each and every word.
The team included officer on special duty
Hanish Yadav, a former McKinsey partner,
ED (public grievances) Anant Swarup and
ED (finance-resource mobilisation) Namita
Mehrotra. They pored through small chits
of paper that the minister left for them.
He has a habit of writing down his
thoughts and ideas as they struck him. He
would write on small chits, post-its or

Photo: AMRENDRA JHA

whatever was available as he waited for

his flight or travelled in his car. So there
would be a small post-it, for example, with
10 words like e-catering expansion, selfhelp groups written on it, said an official.
And Prabhu was working all the time.
When one of his team members left a
draft for the minister at 1.30 am on
February 19, he got back a corrected
copy at his desk in less than six hours.
The CA in the minister surfaced when
he suggested consolidating 14 railway
companies in one holding company. His
idea was that corporates like Vedanta
and Tata Sons had done the same successfully, and railways too would benefit operationally and financially.

BUDGET PROMISE WiFi at stations, integrated mobile apps, ecommerce platforms, barcoded tickets to improve customer experience

Railways to Turn Smarter with Apps, Drone Technology

Team ET

New Delhi: The Indian Railways plans to

introduce WiFi enabled stations, integrated
mobile applications, ecommerce platforms,
barcoded tickets and project management
through use of drone and geospatial based
satellite technology as railway minister
Suresh Prabhu bets on technology to improve customer interface and monitoring of
project implementation.
Presenting the rail budget for 2016-17,
Prabhu on Thursday stuck to his promise of
innovative solutions and announced several
measures for technological upgradation of
railways in sync with the needs of consumers and keeping in mind the safety of the railways workers.
The measures are in line with Prime
Minister Narendra Modis Digital India and
Startup India programmes, whether it be
quadrupling of stations with WiFi services,
eyeing ecommerce as a potential platform to
expand services, encouraging innovation by
investing in startups, satellite monitoring of
projects progress or smart cards for reserving tickets. The measures include a plan to
use the data generated by the railways to improve operations and investment decisions.
We collect many gigabytes of data every
day. To analyse this we will set up a dedicated, cross-functional team called Special
Unit for Transportation Research and

Analytics to carry out detailed analytics

leading to optimised investment decisions
and operations, the minister said in his
address in the Lok Sabha.
IT industry body Nasscom said in a statement, We are glad to note that the government is walking the talk on IT integration and
deployment of e-services, to achieve the
dream of Digital India. These announcements
are testimony to the Centres commitment towards the upgradation of services; giving the
transportation lifeline of India its due.
ONLINE SERVICES

Prabhu said the railways will allow sale of

tickets through handheld terminals and sale
of platform tickets through ticket vending
machines. He also announced the launch of
barcoded tickets, scanners and access control on a pilot basis.
E-ticketing facility will be extended to foreign tourists in the next three months for
non-resident Indians with foreign debit or
credit cards and journalists with concessional passes.
The minister said ticket cancellation facility will be made available through the 139
helpline using a one-time password. The
budget proposes to integrate various facilities into two mobile apps, one of which will
deal with ticketing issues and the other with
receipt and redressal of complaints.
Prabhu announced that the e-catering services will be extended from 45 stations to all

408 A-1 and A class stations. With the governments emphasis on Swachh Bharat
Abhiyan, a passenger can request for cleaning of a coach or toilets on demand through
SMS under the Clean My Coach service.
The Indian Railways plans to cash in on the
ecommerce boom, with Prabhu saying,
Door-to-door connectivity is especially importantand we will take all steps necessary to expand our service offerings specially to growing sectors such as ecommerce. We
will also initiate a pilot project for online
booking of parcels. The IRCTC website also
offers opportunities for exploiting ecommerce activities on account of the large
number of hits that it receives.
The government plans to monetise the soft
assets of the state-run behemoth like data,
software and some of the free services such
as PNR enquiry, ecommerce activities on the
IRCTC website.

In line with international best practices,

Prabhu said that the railways will rely on
technological solutions for project management and monitoring. He asked states to
partner the Centre in setting up more satellite terminals through public-private partnership mode.
Keeping in mind the Indian Railways track
maintainers or gang men, who are most vulnerable to getting overrun by speeding
trains, there is a proposal to equip them with
devices called Rakshak which will intimate
them about approaching trains.
Among measures aimed at technological
upgradation of the railways systems, the
minister proposed progressive CCTV coverage at tatkal counters and a plan to roll
out a process of awarding tenders electronically in 2016-17.
PRASAD

SURESH PRABHU
Union Railway Minister

TRAIN AND STATION INFRA

In his speech, Prabhu said the railways has

partnered American technology firm Google
to offer WiFi services at 100 stations this year.
Another 400 stations will get WiFi in the next
two years, he said.
Inside the trains, Prabhu proposed to set up
information boards to list on-board services
and GPS-based digital displays to provide
information regarding halts.
DIGITAL MONITORING AND MAINTENANCE

We collect many gigabytes of

data every day. To analyse this
we will set up a dedicated,
cross-functional team called
Special Unit for Transportation
Research and Analytics to carry
out detailed analytics leading
to optimised investment
decisions and operations

INNOVATION AND STARTUPS

In his second railway budget, Prabhu earmarked `50 crore for an innovation fund for
grants to employees, startups and growthoriented small businesses, and proposed to
set up innovation labs in workshops and production units. The initiative will be administered by an innovation committee comprising investors, representatives from National
Academy of Indian Railways, Railway Board
and Kayakalp headed by chairman emeritus of Tata Sons, Ratan Tata. A programme
management structure will be put in place to
manage this initiative.

Rail budget showcases a vision to

reorganise, restructure
and rejuvenate railways
with new processes,
structures, norms and
sources of revenue.
Vision 2020
will make
the railways
free from
capacity
constraints
with higher
train speed,
punctuality
and safety. In the last
year, we have seen a lot
of success and this budget is an effort to further
improve on this.

Narendra Modi
@narendramodi
#RailBudget2016 caters
to all sections of society.
It stands out because
it is an infrastructureled & employment
generating budget.

First Takes
LALU PRASAD

Former Rail Minister

Under BJP, the

Railway Ministry
has derailed
totally
NITISH KUMAR
Chief Minister, Bihar

With the decline

in international
oil prices, they
should have
actually lowered the train
fare...no increase in fare
could serve the purpose of
breaking news, but its not a
big deal in view of falling
international oil prices
GAUTAM ADANI

Chairman, Adani Group

This budget is
forward looking,
pragmatic and
strategically
oriented. The Railway
Minister has proposed
critical improvements to the
freight system management
and movement
NALIN JAIN

CEO, South Asia,

GE Transportation & Aviation

The 2020 vision

of the minister
clearly defines
the special
package to improve the
freight ecosystem in India
thus getting fresh revenue
streams for IR. Globally, the
railway sector is highly
evolved from a technological
standpoint, a space where
India lags behind

Capital Expenditure to Help Fast-track Infrastructure Growth

by Invite

RAVI UPPAL
MD, JSPL

The budget in spirit sets

the track for holistic
growth of the railways

The Rail Budget unequivocally affirmed the governments commitment to expand, upgrade and modernise rail infrastructure. A 20%
year-on-year increase in capital expenditure proposed for 2016-17 will
give a major impetus to the Indian
Railways efforts to improve its infrastructure with a sense of urgency.
The announcement of three new dedicated freight corridors, two new loco
factories, additional networks, port
connectivity and upgradations of
tracks and railway stations will go a
long way to enhance the capacity, competency and efficiency of the Indian
rail system, which in recent years has
lost its market share across both the
freight and passenger segments.
The railways investment programmes

are not merely limited to hard infrastructure and rolling stock, but also aim to introduce state-of-the-art facilities to enhance service quality and ease of doing
business for its customer segments. The
railways ministry also enumerated several initiatives to bring in more transpar-

PRASAD

ency into its functioning, including procurement. The renewed focus on

improving market share of rail freight
traffic in India is a welcome move, given
that in India, the market share of rail
freight stands at a dismal 30%.
The railways are obviously taking several
Adoption of
PPP models, measures to cut its operating costs but unfortunatebesides reducing invest- ly, the impact is still not
ment burden visible in its operating ratio at 93.8% for 2015-16.
will enable
The railways cannot conRailways to
better man- tinue with revenue deficit
age its spread and incur losses needing
federal budgetary proviof activities
sions. While the minister
did mention about investment support
from institutions like LIC and divest-

ment of its assets, it has to set a timebound agenda for adopting the PPP
model, which is yet to take off in a substantial way.
The green shoots of the PPP mode in
building railway stations and augmenting rail connectivity to ports is a decisive move. It has been long desired that
private players play a larger role in the
developmental ecosystem of railways,
however, the fineprint of achieving this
synergy needs to be fully comprehended. Adoption of PPP models, besides reducing investment burden will also enable Indian Railways to better manage
its spread of activities.
The railways 12.5% lower revenue
performance than budget is definitely a
setback, which needs to be overcome
with a steady resolve and micro level ac-

tion plan. The budget speech did not

mention any revision of freight and
passenger rates for the next year. The
exact impact of budget on customer
segments and its consequent reverse
impact on the railway earnings and
profitability will be known only after
they are announced.
While catering to the growing aspirations of a billion plus population, the rail
budget in spirit sets the track for holistic
growth of the Indian Railways, the transport life line of the country. The budget
while very positive and firm in its intent
will have to be backed up by robust execution of both capital investment and earning plans. Good financial performance
would remain quintessential to the
achievement of its long-term growth plan
as well as the future of Indias logistics.