In an obvious reference to the populist announcements of his predecessors, Prabhu – a chartered accountant by training – left nothing to doubt about his intention to restructure and modernise India's public transporter, which has remained trapped in a vicious cycle of underinvestment.
"The legacy of the past will take time to neutralise, but it cannot be business as usual," Prabhu said in his maiden budget speech to parliament.
The budget largely focuses on increasing capacity, with the construction of second, third or fourth tracks on 1200km of the network over the 2015-2016 financial year at a cost of Rs 86.9bn, an 84% year-on-year increase in capacity enhancement spending.
Rs 84.7bn is allocated for rolling stock procurement and Rs 93.2bn for construction works on the eastern and western Dedicated Freight Corridors (DFCs). Plans to build four more DFCs have also been announced.
In a speech lasting 64 minutes, the railways minister also announced plans to introduce "a pair of modern trains for faster and more comfortable travel," and these will be manufactured domestically.
IR is expected to borrow Rs 176bn this year and Rs 57.8bn is allocated for PPP projects. "It is anticipated that the plan size will increase, once resources from institutional bodies including multilateral agencies are formalised during the course of the year," the minister says.
Identifying four goals, five execution strategies and an 11-point action plan, Prabhu announced an ambitious operating ratio target of 88.5% for the 2015-2016 financial year, higher than IR has achieved at any point in the last nine years.
In the longer term, Prabhu announced IR would invest Rs 8.56 trillion over the next five years including:
- Rs 1993bn for capacity enhancements and elimination of bottlenecks
- Rs 1930bn for network expansion and electrification
- Rs 1270bn for safety improvements
- Rs 1020bn for rolling stock procurement, and
- Rs 650bn for high-speed projects
Over the next five years IR will increase passenger capacity from 21 million to 30 million and the network will grow by 20% from 114,000km to 138,000km. Freight capacity will rise from 1 billion to 1.5 billion tonnes.