To his credit, the minister correctly resisted the temptation to announce a raft of projects that would only further cripple the railways. Instead, he concentrated on steps to shore up the financial strength of the organisation. He charted a growth rate of 14 per cent for total traffic receipts. Minus inflation, it means a real expected growth rate of 7 per cent, about one per cent more than the pace at which the economy might grow in 2013-14. He projected close to 9 per cent growth in revenue terms for freight traffic and about 30 per cent for passenger traffic. While these are ambitious numbers, the minister may have reason to be optimistic. The rise in both streams includes the impact of the revision in passenger fares announced in January and now a fuel adjustment component for goods traffic. He also noted that an annual rise in passenger fares of about 5-6 per cent for the next 10 years is essential to keep the railways in the black. That, despite the rise, the allocation for the two capital and development funds that finance fresh investment is meagre, shows the perilous nature of railway finances. The plan to focus on just 347 projects and the proposal to set up a Debt Service Fund, are steps towards financial consolidation.
But the critical issue of providing a new direction to the railways will remain unaddressed for now. An independent rail tariff authority is said to be in the offing. The setting up of the authority could be a fine opportunity to make the sector more dynamic by bringing in more players, but the budget is silent on it. Bansal announced that he expects a Rs 1,00,000 crore investment through public-private partnerships in the next five years, but here too the details are missing. The creation of a conducive environment to enable the private sector to partner the railways remains an unfinished theme in this budget.