REASONS TO CHEER THE NEW RAILWAY BUDGET

The first combined Budget of Independent India, spelt out a brand new template for Indian Railways. Transport integration and making the railways a competitive mode of commuting really headlined the announcements.
The budget has allocated Rs. 1,31,000 crores to Indian railways for this year with a focus on four major areas; passenger safety, capital and development works, cleanliness and finance and accounting reforms.

A ‘Rashtriya Rail Sanraksha Kosh’ for passenger safety, will be created with a corpus of Rs.1 lakh crores over a period of 5 years, to be funded by seed capital from the Government, Railways’ own revenues and other sources. Expert international assistance will be harnessed to improve safety preparedness and maintenance practices.

Talking about the proposed steps for modernization and upgradation of identified corridors, the Finance Minister said that Railway lines of 3,500 kms would be commissioned in 2017-18. and steps would be taken to launch dedicated trains for tourism and pilgrimage. In the next 3 years, the throughput is proposed to be enhanced by 10%. Further, the Minister added that Railways have set-up joint ventures with 9 State Governments and 70 projects have been identified for construction and development.
According to DTA Consulting principal Deepak Talwar “The move to make Indian Railways both competitive with other modes of transport and integrating it into the larger federal scheme is a very bold move as it will herald a new era in connectivity across the length and breadth of India for both goods and people”
At least 25 stations are expected to be awarded during 2017-18 for redevelopment and 500 stations will be made differently abled friendly by providing lifts and escalators. It is also proposed to feed about 7,000 stations with solar power in the medium term, of which, a beginning has already been made in 300 stations. Works will be taken-up for 2,000 railway stations as part of 1000 MW solar mission.

By 2019, all coaches of Indian Railways will be fitted with bio toilets. Pilot plants for environment friendly disposal of solid waste and conversion of biodegradable waste to energy are being set-up at New Delhi and Jaipur Railway Stations and five more such Solid waste management plants are now being taken-up.

Some other steps to be introduced include:
• End to end integrated transport solutions for select commodities through partnership with logistics players, who would provide both front and back end connectivity. Rolling stocks and practices will be customized to transport perishable goods, especially agricultural products.
• Competitive ticket booking facility to the public at large. Service charge on e-tickets booked through IRCTC has been withdrawn.
• As part of accounting reforms, accrual based financial statements will be rolled-out by March 2019. The aim is to improve the Operating Ratio of the Railways. Tariffs of Railways would be fixed, taking into consideration costs, quality of service, social obligations and competition from other forms of transport.
• A new Metro Rail Policy will be announced with focus on innovative models of implementation and financing, as well as standardization and indigenization of hardware and software. This will open-up new job opportunities for our youth. A new Metro Rail Act will be enacted by rationalizing the existing laws. This will facilitate greater private participation and investment in construction and operation.

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THE POSITIVE IMPACT OF THE UNION BUDGET

The much-awaited Union Budget for 2017-18 turned out to be less exciting and more pragmatic. As expected the budget deferred any major changes on indirect taxes to a later date, when GST will be introduced, instead making only cosmetic changes to direct tax rates.
The overall focus continued to be on the ease of doing business and an increase in the GDP growth rate.
The two headline grabbing steps announced in the budget are: (a) Reform of electoral funding of political parties and (b)Disbanding of FIPB, the body clearing foreign investment proposals, with the latter impacting potential foreign investors.

The budget was placed in the back drop of sudden cancellation of two high value currency notes in November last year and the resultant adverse impact on GDP growth rate in the short term. However, the remonetisation of currency that were withdrawn from circulation has now nearly complete. The adverse effect, as per the budget, will not affect the economy in the financial year 2017-18.
Policy analyst Deepak Talwar from DTA Consulting stated that the “Overall the budget had a positive impact on the capital markets and seemed to lend credence to the Government’s fiscal objectives, as well as its desire to keep GDP growth rate highest among the large global economies.”
In addition, the agreement reached on the contentious issues over introduction of GST will help the economy during the year.

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