Short Review of Railway Budget 2015-16

Review of Railway Budget 2015-16

This railway budget seems to focus on improve passenger’s commuting experience and at the same time gives a signal for investments thrust. It proposes an annual plan of Rs 1 lakh crore with support from central government of budget allocation, market borrowing, internal resources and institutional investments. The highlights of railway budget are given below:

(A) There is no hike in passenger’s fares this time. The railway minister’s statements range from additional wagons to accommodate more passengers to improving security with equal importance of cleanliness indicates the government’s intention to improve the commuting experience. Only time will tell whether these promises fulfilled or get blocked due to lack of funds investment.

(B) The revised operating ratio for this year was 91.8%. Railway Minister Suresh Prabhu has set an ambitious operating ratio of 88.5% for the financial year 2015-16. The operating ratio is the amount that the railway has to spend to earn Rs 100. A lower operating ratio helps to improve passenger amenities and creating long term assets. The proposed operating ratio will be the best in the last nine years. Lower diesel prices will certainly help to keep lower the operational ratio.

(C) The government has proposed to hike the freight rate with effect of 1st April 2015. It will increase freight earnings by 13.6% in FY 2015-16.

(D) The focus on expansion of railway’s capacity over the next five years by increasing in daily passenger carrying capacity from 21mn to30mn, increase in track length by 20% from 1,14,000 Km to 1,38,000 Km and also the rise in freight-carrying capacity 1bn to 1.5bn ton.

(E)  There are much attention to modernization of infrastructure at railway stations, signaling and electrification works, coaches and wagons. A great attention has given to dedicated freight corridor projects which can benefit many railway equipment suppliers.

(F)   ABB, BHEL, KEC International, L&T, BEML, SIEMENS, Kalindee Rail Nirman, Texmaco and Titagarh Wagons may get benefited from this year budget proposals.

Overall, the railway budget for 2015-16 showed its thrust towards investments.

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