Suresh Prabhu's budget focusses on putting the house back in order

Promising to make rail travel a "happy experience" by focusing on amenities, railway minister Suresh Prabhu, in his maiden budget speech on Thursday, instead of making any new announcements, decided to put his house in order, desisting populist measures and consolidating on existing resources.

While sparing passengers from any fare hike, he, however, slapped a 10% increase in the base class of items, including food grains, pulses and urea, which is bound to make farm produce costlier.

The minister had the whole House laughing when he said 'prabhu' did not respond when he asked for a way to achieve a turnaround. "Par mere mann mein savaal uthta hai — He Prabhu, ye kaise hoga? (But a question comes to mind, oh Lord, how will it happen?" the railway minister said, and then referring to himself, he added that "this Prabhu" thought ways can be found out in the century year of Mahatma Gandhi coming to India.

With a focus on generating resources for the ailing railways, which was milked hard by successive ministers, he tweaked the freight rates on 10 commodities — 0.8% hike on kerosene, cooking gas (LPG), iron, steel and iron ore for domestic use, 2.7% hike on cement, 2.1% hike on groundnut oil, 3.1% hike on pig iron and metal scrap, 3.5% hike on bitumen and coal tar, and 6.3% hike on coal. The only items getting a minute drop in freight rates are limestone, dolomite and manganese ores (-0.3%) and high speed diesel oil (-1%).

The 61-year-old CA from Mumbai, who drifted from the Shiv Sena to the BJP, however, angered MPs by not announcing new trains or increasing frequency of the existing ones. He defended dropping such customary announcements by saying that a comprehensive review of pending projects and other backlog was still underway.

Unveiling his five-year action plan that goes beyond the present government's tenure, with 11 major thrust areas for "kayakalp" (innovation) and transformation of the Indian Railways, Prabhu said priority in the next five years will be on improving capacity on the existing high-density networks as it is cheaper, involves no major land acquisition and completion time is shorter.

Notwithstanding the railways ending the current fiscal of 2014-15 with an estimated surplus of Rs7,278 crore, not big enough for so many pending works, Prabhu talked of tapping all possible resources, and even asked the MPs to donate from their MPLAD fund for improving passenger amenities.

Noting that the budgetary support isn't enough to fund even the ongoing projects, he said they can be accelerated by tapping market funding from institutional finance agencies and multilateral lending. More than 100 projects worth more than Rs1 lakh crore have been identified for completion through extra-budgetary resource, he added.

Other resources he sought to tap included "partnership" with state governments, multilateral and bilateral organisations, pursuing PSUs to build capacity for transport of critical commodities, and partner with the private sector "to improve last-mile connectivity, expand our fleet of rolling stock and modernise our station infrastructure".

A policy of open bidding for using space and air rights under the station redevelopment policy was introduced for all stations except those already undergoing development. But the scheme is with a rider — land will not be sold. Anyone can participate with designs and business ideas by providing the operational requirements of railways for running trains at these stations.