Speech of Shri D.V. Sadananda Gowda
Minister of Railways
July 8, 2014
1. I rise to present before this august House the Statement of Estimated Receipts and Expenditure for 2014-15 for Railways. As I stand in this Temple of Democracy, I owe this opportunity to the people of this country who have elected us to represent them and to shape their destiny.
2. I am grateful to the Hon'ble Prime Minister Shri Nar endra Modiji for having reposed his faith in me and entrusting th is huge responsibility of leading Indian Railways. I promise to fulfill this responsibility and make every endeavour not only to lead Indian Railways, but also aid in building a vibrant India under the dynamic leadership of Shri Narendra Modi ji.
3. It gives me immense pleasure to present my maiden Rai lway Budget. Indian Railways, being the nation's prime mover, is the structure and soul of Indian economy. It echoes rhyme and rhythm in the hearts of every citizen of this country - from Baramulla in the North to Kanyakumari in the South and from Okha in the West to Lekhapani in the East. Madam Speaker, we all know t hat Indian Railways cut across all barriers of regions, classes and creed and is a microcosm of India on the move.
4. From a man on the streets of Bengaluru to fish vendors in Kolkata to the hustle bustle at Nizamuddin Station, everywhere you find a citizen of this country rushing to connect with Ind ian Railways.
5. Madam Speaker, though I am hardly a month old in the office, I am flooded with requests and suggestions for new trains, new railway lines and better services from the Hon'ble Members of the Parliament, from my colleagues in the Government, from States, from stake holders, from organizations and from peo ple of all walks of life. I know that everybody feels that they have a solution for the 2 challenges which Indian Railways face. I too thought so when I was an outsider to this system before I was exposed to the intricacies and complexities of this vast organization. Now, I am o verwhelmed with the enormity of my responsibility in fulfilling the se expectations as Minister of Railways. This, Madam Speaker, reminds me of Kautilya's words
In the happiness of the people lies the Ruler's happiness Their welfare is his welfare What pleases him, the Ruler shall not consider good but whatever pleases his people the Ruler shall consider good - Kautilya's Arthashastra
6. Indian Railways run 12617 trains to carry over 23 million passengers per day connecting more than 7172 stations spread a cross the sub continent. It is equivalent to moving the entire pop ulation of the Australia. We run more than 7421 freight trains carrying about 3 Million Tonnes of freight every day. Madam Speaker, having achieved the distinction of entering the select club of railways of China, Russia and USA in carrying more than one billion tons of freight, I now target to become the largest freight carrier in the world.
7. Madam Speaker, as you know, apart from serving the p assengers, Indian Railways carries coal It carries steel It carries cement It carries salt It carries food grains and fodder and it also carries milk. 3 Thus, Indian Railways practically carries anything an d everything and it never says no to 'a thing' if it fits in the wagons. Most importantly, we are the backbone of supply chain of the defence establishment and play a very crucial role in securit y of the nation.
8. Madam Speaker, while we carry 23 million passengers a day, there are still large number of people who have not set a foot on a train yet. We carry over one-billion tonnes of freight a year, connecting ports and mines to industrial clusters, but still ther e are vast tracts of hinterland waiting for rail connectivity. Though fre ight business has grown steadily over the years, Indian Railways carry only 31% of the total freight carried in the country by all modes. T hese are the challenges we have to face.
9. Madam Speaker, an organization of this magnitude vested with varied responsibilities, is expected to earn like a commercial enterprise but serve like a welfare organization. Th ese two objectives are like two rails of the railway track, which though travel together but never meet. So far, Indian Railways have managed to do tight-rope walking by balancing these twin conflict ing objectives.
10. Social service obligation rose from 9.4% of Gross Traffic Receipts in 2000-01 to 16.6% in 2010-11. In 2012-13, such obligations stood over Rs 20,000 crore. The total investment, which is the Pl an Outlay under budgetary sources, in the same year, was Rs 35,241 crore. As an amount, the burden of social service obligation is mo re than half of the size of our Plan Outlay under budgetary sources.
11. Madam Speaker, an organization spending an amount equivalent to more than half of its Plan Outlay under budgetary sources on social obligations, can hardly have adequate resources for i ts development works. However, Madam Speaker, Indian Railways would continue to fulfill its social obligations, but sustaining these o bjectives beyond a point is not possible without compromising on eff iciency and safety of train operations.
12. We have a total track length of 1.16 lakh kilometers; 63,870 coaches; more than 2.4 lakh wagons and 13.1 lakh employees. This calls for 4 expenditure on fuel, salary and pension, track & coac h maintenance and more importantly on safety works. This takes up most of our earning from the Gross Traffic Receipts. In the year 2013-14, Gross Traffic Receipts were Rs 1,39,558 crore and total Working Expenses were Rs 1,30,321 crore, which works out to an Operating Rat io of almost 94%.
13. This, Madam Speaker, implies that we spend 94 paise out of every rupee earned, leaving 6 paise only as surplus. This s urplus, apart from being meager, is continuously on decline due to n on-revision of fare. The surplus, after paying obligatory dividend and lease charges, was Rs 11,754 crore in 2007-08 and is estimated to be Rs 602 crore in the current financial year. Madam Speaker, this meager surplus so generated is re quired to finance the Plan Outlay for safety, capacity expansi on, infrastructure, improving passenger services and amen ities.
14. Funds to the tune of about Rs 5 lakh crore i.e. around Rs 50,000 crore per year for next 10 years, are required for ongoing projects alone. This leaves a huge gap between what is available as surplus and what is needed.
15. While prudent efforts should have been made to address this gap, the tariff policy adopted lacked rational approach. Passenger fares were kept lower than costs, thus causing loss in the passenger train operations. This loss kept on increasing from 10 paise per passenger kilometer in 2000-01 to 23 paise in 2012-13, as the passenger fares were kept low always.
16. On the other hand, freight rates were revised periodically and kept high in order to compensate the losses sustained in passenger sector resulting in freight traffic getting diverted consis tently. Also the share of railways in freight traffic came down cons istently in the last 30 years. Madam Speaker, it is important to note th at decline in the share of total freight traffic is potential revenue loss.
17. Madam Speaker, having spoken about how revenue was frittered away, now, let me touch upon how the investments were misdirected.