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India railway budget fails to impress investors
July 8, 2014, 12:07 pm

 Commuters hang by doors of a crowded local train in Mumbai, India, Tuesday, July 8, 2014 [AP]


Commuters hang by doors of a crowded local train in Mumbai, India, Tuesday, July 8, 2014 [AP]

The Indian government has said it will seek private funding for railway projects in the country, but has not outlined details on plans to attract investment.

Apart from building a bullet train line, the Indian government is going to speed up some railway lines between major cities as one of the efforts to improve the rail transport system of the country, said Indian Railway Minister Sadananda Gowda on Tuesday.

India’s railway budget presented on Tuesday has revised up the plan outlay to 654.45 billion rupees for 2014-2015.

However, the benchmark Bombay Stock Exchange Sensex retreated from record highs by falling 202 points, marking its biggest single-day fall in over 10 months after the rail budget failed to impress investors. Expectations from India’s new government, formed by the right-wing Bharatiya Janata Party that swept the Indian elections with promises of serious reforms, are sky-rocketing even as foreign investors are keen to know plans to jumpstart the Indian economy.

While presenting the railway budget for the 2014-15 fiscal year, Gowda said the country’s first bullet train will start off with the Mumbai-Ahmedabad track, construction of which will begin by 2015.

The speeding up of the trains in select sectors to up to 200 km per hour include the capital Delhi-Agra rail line, the Delhi-Chandigarh and Mumbai-Ahmedabad sectors.

“It is the wish and dream of every Indian that India runs a bullet train as early as possible. Indian Railways is on its way to fulfill that long cherished dream,” Gowda said.

The minister said while bullet trains will require completely new infrastructure, higher speed for existing trains will be achieved by upgrading the present network.

“Hence, an effort will be made to increase the speed of trains to 160-200 kmph in select sectors to significantly reduce travel time between major cities,” he said.

Meanwhile, the first railway budget of the new Indian government was also criticized for its reliance on the public-private partnership (PPP) model.

“Rail budget promises a lot that’s desirable. Unclear where cost savings are coming from. Means it’s all up to PPPs. What could go wrong?” tweeted noted Indian columnist Mihir Sharma.

“Railway Minister DV Sadananda Gowda has looked to a public-private partnership model as the solution to the Indian Railways’ desperate state of finances. But empirical evidence shows that railways has a very poor track record in attracting investments through this route,” wrote Arvind Jayaram in India’s national daily Hindu.

India has one of the world’s largest railways, which transports 23 million passengers a day. Indian Railways is one of the world’s biggest employers with more than 1.3 million employees. The Indian Railways lost 300 billion rupees ($5 billion) last year.

Indian Finance Minister Arun Jaitley will present the federal budget on 10th July in New Delhi.

 

TBP and Agencies

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