Suresh Prabhu's Railway Budget 2015 gets thumbs up from India Inc

MUMBAI: Corporate leaders termed the Rail Budget as "innovative" with a thrust on modernisation and said proposals contained in it present a clear roadmap and vision for the overall transformation of the Indian railways.

Sunil Kant Munjal, Hero MotorCorp Joint MD and former CII president, said, "By initiating measures to improve the operational efficiency of Railways and introducing innovative financial mechanisms such as engagement of pension funds and other long-term debt instruments, the Budget has sought to improve its competitiveness."

Similarly, moves at resource mobilisation by strengthening the PPP model and also through new technologies, will go a long way to turnaround rail operations, he said.

"These measures will lead to greater efficiency and result in the Railways becoming the preferred mode of transport for passengers as well as goods," Munjal said.

Godrej Group Chairman Adi Godrej said Railway Minister Surech Prabhu has introduced a number of "innovative" steps to increase revenue.

"The roadmap laid for attracting private investment through tapping low-cost long-term funds from insurance and pension funds, multilateral and bilateral agencies, forming JVs with IRFC or existing NBFC of a PSU, creating a holding company to raise long-term debt etc will go a long way in boosting the cash-strapped sector and facilitate completion of many crucial rail projects," Godrej said.

L&T Finance Holding Chairman Y M Deosthalee described the Budget as "a vision statement accompanied by a decisive roadmap to make Railways a viable transportation model by transforming it from being cost-centre to a profit centre. This is evident in budgeting to achieve a lower operating ratio of 88.5 per cent and higher levels of efficiencies."

On the Minster's plan to augment funds from the market, Deosthalee said the proposal to introduce structural and systemic reforms to create infrastructure through market borrowing is a welcome step. So is the move to bring in public private participation to generate sustainable revenue.

The sharp 52 per cent increase in planned expenditure to Rs 1 trillion for FY16 provides the much-needed spending push, he noted.

Ajay Shriram of Shriram Group and CII President said Prabhu has unveiled a comprehensive plan for modernisation of the Railways.

"The proposed Rs 8.5 trillion capex over the next five years would result in a truly modern rail system which would significantly propel economic growth," he said.

CII President-designate Sumit Mazumder said, "The Budget has delineated a blueprint of what needs to be done in the next five years to bring back the primacy of Railways as a premier mass transport system."

"The Minister has rightly stressed on timely implementation of projects. The announcement of a reliable and simplified procurement process is a welcome step. This is a forward-thinking and long-term visionary Budget," he said.

GE South Asia President and Chief Executive Banmali Agrawala, who is also a member of CII Rail Committee, said the Minister has presented a very ambitious and promising Budget with significant emphasis on addressing the needs of passengers and improving freight services.

"The focus on finding innovative solutions in both technical and financing aspects, enhancing existing infrastructure, mobilising resources and using new technologies to transform customer experience and increase operational efficiency are steps in the right direction.

"The partnership with states and the private sector in execution of projects holds great promise. The efforts towards building dedicated freight corridors, bringing in advanced technology in locomotives are key steps in achieving the ambitious freight target of 1.5 billion tonne," he said.

However, Jindal Steel and Power Ltd head Ravi Uppal flayed the Budget, saying it lacks finer details and only promises a superior ride to everyone.

"Another downside is the 6.30 per cent hike in freight rates for coal which will dent a range of industries and also Make in India spirit. Along with the 0.8 per cent hike in steel freight this is a double whammy that could have been avoided," he said.

Tilak Raj Seth, Executive Vice-President (mobility) at Siemens India, said, "I would rate this Budget as very positive as it would be beneficial for the industry and commuters alike. Demand for rail services is directly linked to the growth in core infrastructure industries. Through this Budget, the Minister has made an honest attempt to present a structured blueprint for transformation of Railways."

Echoing his views, Alstom Transport India Managing Director Bharat Salhotra said, "The Budget is certainly forward-looking as it aims at infusing new purpose and direction to Railways.

"Overall, the Budget is right on intention and the key to success now lies in execution," he added.

Salhotra noted that the budget has given due importance to quality of travel and safety of passengers. He said a vibrant PPP model to execute projects will lead to rapid modernisation of Railways and it also offers huge scope for private players to contribute in areas like signaling, track renewal and electrification.