Railway Budget 2015: Show me the money!

Railway Budget 2015. In a few short words:

• Rs. 8.5 lakh crore ($137,606,245,000, or +-$138 billion) to be invested in five years (2015-16/2019-20).

• <Rs. 9,000 crore ($1,457,371,800, or <$1.5 billion) to be invested in fast-tracking 7,000-km of (doubling/tripling/quadrupling sanctioned tracks) and 1,200-km of new commissioning in 2015/16.

• Rs. 96,182 crore (or $15,574,770,500, or >$15.5 billion) to be invested in 77 projects of 9,400-km of doubling/tripling/quadrupling works along with their electrification.

• • • • •

“…[W]e spend 94 paise out of every rupee earned, leaving 6 paise only as surplus. This surplus, apart from being meager [sic], is continuously on decline due to non-revision of fare. The surplus, after paying obligatory dividend and lease charges, was Rs. 11,754 crore [$1,902,851,500, or >$1.9 billion] in 2007-08 and is estimated to be Rs. 602 crore [$97,465,500, or >$97 million] in the current financial year.”

[DV Sadananda Gowda, Union Minister for Railways, 8 July 2014]

(What a fall in 8 years. FY 2014/15 ended with 5.1% of the surplus in 2007/08.)

In fact, the surplus at the end of March 2014 was Rs. 690 crore. But why quibble about dainty sums…

– – – – –

…when you can gripe about humongous deadbeat amounts?

“There has been focus on sanctioning projects rather than completing them. In the last 30 years, as many as 676 projects were sanctioned worth Rs. 1,57,883 crore [$25,569,988,600, or >$25.5 billion]. Of these, only 317 projects could be completed and 359 projects remain to be completed which will now require as much as Rs. 1,82,000 crore [$29,490,188,000, or <$29.5 billion].

“In the last 10 years, 99 New Line projects worth Rs. 60,000 crore [$9,717,318,000, or >$9.7 billion] were sanctioned out of which only one project is complete till date. In fact, there are 4 projects that are as old as 30 years, but are still not complete for one reason or another. The more projects we add, the thinner we spread our resources and longer it takes to complete them.”

[DV Sadananda Gowda, Union Minister for Railways, 8 July 2014]

– – – – –

The clincher:

“I am sure, if this trend is allowed to continue, many more thousands of crore will get spent yielding hardly any returns.”

[DV Sadananda Gowda, Union Minister for Railways, 8 July 2014]

• • • • •

So, now we’ll be left holding a giant baby whose diapers haven’t been changed in three decades.

Make that 260 REALLY stinko babies (going on 30 years without a change) + 99 stinko babies (10 years without) + 77 babies with new Huggies = 436 babies.

DV Sadananda Gowda spoke of

“[f]unds to the tune of about Rs. 5 lakh crore [$81,011,050,000, or >$81 billion] i.e. around Rs. 50,000 crore [$8,097,105,000, or >$8 billion] 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.”

• • • • •

Additional information on increased rates for carriage

• Grains, pulses, and urea: 10%

• Coal: 6.3%

• Cement: 2.7%

• Scrap and pig iron: 3.1%

• Bitumen and coal tar: 3.5%

• Steel: 0.8%

And what’s the payback for freighters? Says Suresh Prabhu, Union Minister for Railways:

“We will grow our annual freight carrying capacity from 1 billion to 1.5 billion tonnes.”

Up by a whopping 50%. And the timeframe? Your guess is as good as mine. A Railways Minister usually plays out a good bit of line during budgeting, because of the ginormous magnitude of the monies s/he has to deal with. But it can work both ways: It can give just enough slack, or it can give too much slack. And it has become obvious over the past decade how the latter has ended.

This budget, though, is a recipe for inflation – and spinflation.

• • • • •

Rs. 5 lakh crore in 10 years versus Rs. 8.5 lakh crore in 5 years.

Where on Earth does Prabhu hope to find the money?

“Budgetary support is the easiest way. We’ll tap other sources. Multilateral development banks and pension funds have shown keen interest in investing in the Indian Railways.”

• • • • •

So far, pipe dream. And smoke and mirrors.

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