Railway Grants dominates Budget Session Day 2

Lok Sabha on the second day after its reconvening began discussion on the Demands for Grants Railways for the year 2015-2016. Members from both the opposition and treasury benches raised concerns about railway infrastructure in their constituencies and states during their speeches.

Mr. Suresh Prabhu, the Minister of Railways replied to the debate before the house passed the demands for grants. The Minister in his reply pointed out among other things, that the Railway is currently not being able to meet states’ aspirations due to low internal generation and low allocation from the Union Budget. One way of generating revenues could be through market borrowing and reducing expenditure. He stated in his speech that Special Purpose Vehicles (SPVs) would be established with the states as companies and the revenue generated in these companies will be used to build railways infrastructure in those states.

The Standing Committee’s Report on Railways Demand for Grants was submitted yesterday. In the report the committee raised questions on rail access for remote areas in the country as no new trains were announced during the Railways Budget speech.

The Committee observed that the projections in different segments of the Railways are unrealistic and the actuals are mostly below the targets set. It also observed that the revenue from premium trains is not often proportionate to the investment in them.

The Committee recommended the creation of a National Policy of the Indian Railways on an urgent basis, which should be the guiding force for the Railways network, irrespective of the Government in power

Learn more about the overall functioning of Railways sector here and read a detailed analysis of the Railways Budget 2015-16 here.