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JSW Steel bags iron ore mines in Odisha

February 6, 2020 Leave a comment

Recently, JSW Steel won the largest iron ore block, the Nuagaon mine, in Odisha with estimated reserve of around 118.92 million tonnes. The company has already bagged two mines — Nuagaon and Narayanposhi — with a total reserve of 980 million tonnes.

Next on the line for auction is Jilling-Langalota iron ore block with an estimated reserve of 72.84 million tonnes in Odisha’s Keonjhar district. Among the nine technically qualified bidders, Adani Enterprises, Serajuddin & Co, JSW Steel, Rungta’s Feegrade and ESSEL Mining Industries have emerged as the top contenders.

Union Budget 2020-21 – Key Highlights

February 3, 2020 Leave a comment

The Union Finance Minister Mrs Nirmala Sitharaman presented the Union Budget for the FY20-21 in the Parliament on 01 February 2020. The key highlights of this Budget are:

Budget Highlights

  • Expenditure:  The government proposes to spend Rs 30,42,230 crore in 2020-21, which is 12.7% higher than the revised estimate of 2019-20.
  • Receipts:  The receipts (other than net borrowings) are expected to increase by 16.3% to Rs 22,45,893 crore, owing to higher estimated revenue from dis-investments.
  • GDP growth:  The government has assumed a nominal GDP growth rate of 10% (i.e., real growth plus inflation) in 2020-21.  The nominal growth estimate for 2019-20 was 12%.
  • Deficits:  Revenue deficit is targeted at 2.7% of GDP, which is higher than the revised estimate of 2.4% in 2019-20.  Fiscal deficit is targeted at 3.5% of GDP, lower than the revised estimate of 3.8% in 2019-20.   Note that the government is estimated to breach its budgeted target for fiscal deficit (3.3%) in 2019-20 and the medium term fiscal target of 3% in 2020-21.  This does not include off-budget borrowings (0.9% of GDP in 2020-21).
  • Ministry allocations:  Among the top 13 ministries with the highest allocations, the highest percentage increase is observed in the Ministry of Communications (129%), followed by the Ministry of Agriculture and Farmers’ Welfare (30%) and the Ministry of Home Affairs (20%).

Tax proposals in the Finance Bill

In addition to changes in tax laws, the Finance Bill, 2020 also proposes certain non-tax changes to the Prohibition of Benami Properties Transactions Act, 1988.

  • Change in income tax rates:  The income tax rates have been changed.  Table 1 below compares the current tax rates with the proposed tax rates.  Note that the new personal tax rates are optional and may only be availed if the person satisfies certain conditions, such as if they do not claim certain exemptions or deductions.  These include standard deductions, leave travel allowance, house rent allowance, interest payment on housing loan, and deductions under Chapter VI-A (investments in provident fund, insurance premium, donations to charities, etc.).  Once the option is exercised, it will be applicable for all subsequent years.
Income Current tax rate Proposed tax rate
Upto Rs 5 lakh Nil Nil
Between Rs 5 lakh and Rs 7.5 lakh 20% 10%
Between Rs 7.5 lakh and Rs 10 lakh 15%
Between Rs 10 lakh and Rs 12.5 lakh 30% 20%
Between Rs 12.5 lakh and Rs 15 lakh 25%
Above Rs 15 lakh 30%
  • Option for lower tax rates:  The Income Tax Act was recently amended to give an option to domestic companies to avail of 22% tax rate if they did not claim certain deductions.  The list has been expanded to include other deductions, such as those under Section 80G (donations to charities).  Also, a similar facility has been provided to co-operatives.
  • Benefits to corporates:  Currently, domestic manufacturing companies have an option to pay income tax at the rate of 15% if they do not claim certain deductions under the Act.  This benefit has been extended to domestic companies engaged in electricity generation.
  • Dividend Distribution Tax:  Currently, companies have to pay a tax of 15% on dividends distributed by it to shareholders.   This has been removed and the dividend income will now be taxable in the hands of the recipient.
  • Limit on deductions for social security contributions:  Currently, there is no combined limit for the purpose of deductions on the amount of contribution made by an employer towards a recognised provident fund, an approved superannuation fund and the National Pension Scheme.  A combined ceiling of Rs 7.5 lakh is being introduced on deductions which may be claimed towards such contributions.
  • Residence in India:  The Income Tax Act, 1961 specifies various conditions for determining the resident status of an Indian citizen or a person of Indian origin.  A person will be considered a resident, i.e. their global income is taxable in India, if they are in India for more than 182 days.  This has been reduced to 120 days.  In addition, any Indian citizen who is not liable to tax in any other country or territory by reason of domicile or residence shall be deemed to be a resident of India.
  • TDS on e-commerce transactions:  TDS of 1% will be levied on e-commerce transactions.
  • Housing incentives:  Currently, an exemption is provided on profits or gains arising out of building affordable houses if the project was approved by March 31, 2020.   Further, an additional tax deduction of up to Rs 1,50,000 is provided on interest paid on loans for self-occupied house owners if the loan was sanctioned by March 31, 2020.  The deadline in both cases has been extended to March 31, 2021.
  • Tax changes for start-ups:  Start-ups are allowed to get a full tax waiver on profits for any three consecutive years out of their first seven years, if they are incorporated between April 1, 2016 and March 31, 2021, and their turnover does not exceed Rs 25 crore.   The waiver has been extended to start-ups for any three years out of their first ten years.  In addition, the turnover threshold has been increased from Rs 25 crore to Rs 100 crore.
  • Further, the tax on ESOPs (stock options) held by employees of start-ups will be payable only on the earliest of the following events: (i) expiry of 4 years from the end of the assessment year, (ii) sale of the options, or (iii) till the employee leaves the company.
  • Excise:  The rate of central excise duty on certain tobacco products such as cigarettes, chewing tobacco, and tobacco extracts has been increased.  For example, the rate of duty on chewing tobacco has been increased from 10% to 25% per kg.   Further, crude petroleum has been included at a rate of duty of Rs 50 per tonne.
  • Customs:  Customs duty has been raised on some items such as tableware and kitchenware, footwear, fans, and toys.
  • Health cess on customs:  A health cess will be levied (in addition to customs duty) on certain medical devices, such as X-ray machines, imported into India.  This cess may be utilised for the financing of health infrastructure and services.
  • Obligations on charities:  Charitable organisations get an exemption from taxation under Section 12AA, and donations to them get exemptions under Sections 10(23C), 35, and 80G.  From now, the approvals under these sections will be valid for a maximum of five years.  Any entity having these approvals has to get them re-issued.
  • Commodities Transaction Tax:  Currently, the commodities transaction tax on commodity derivatives is 0.01%.  The Bill creates three tax rates: (i) 0.01% payable by the seller on sale of commodity derivatives based on its price or price index, (ii) 0.0001% payable by the buyer on the sale of an option in goods resulting in the delivery of the goods, and (iii) 0.125% payable by the buyer on the sale of an option in goods resulting in cash payment.
  • Indian Stamp Act, 1899:  Stamp duty will not be charged in the case of transactions in stock exchanges and depositories established in international financial centers set up under the Special Economic Zones Act, 2005.
  • Sovereign wealth funds:  Income arising out of investments made by the Abu Dhabi Investment Authority and other notified sovereign wealth funds in certain infrastructure facilities will be exempt from tax.  This exemption is available if the investment was made before March 31, 2024, and with a minimum lock-in period of three years.
  • The Prohibition of Benami Property Transactions Act, 1988:  The Act constitutes an adjudicating authority on issues related to benami properties.  The qualifications for the chairperson and members of the authority are that they must have been: (i) a member of the Indian Revenue Service as Commissioner of Income-tax or equivalent, or (ii) a member of the Indian Legal Service as Joint Secretary or equivalent.  The Bill states that an individual qualified for the position of District Judge may also be the chairperson or a member of the authority.
  • Removal of tax exemptions on certain allowances:  Certain exemptions on facilities to current and former members of the Union Public Service Commission and the Election Commission such as rent-free residence, conveyance allowance, and medical facilities are exempt from tax.  This exemption has been removed.

Policy Highlights 

  • Legislative Changes:  The Banking Regulation Act, 1949 will be amended for better governance of cooperative banks.  The limit for NBFCs to be eligible for debt recovery under the SARFAESI Act, 2002 will be reduced.  The asset size will be reduced from Rs 500 crore to Rs 100 crore, and loan size will be reduced from one crore rupees to Rs 50 lakh.  The Deposit Insurance and Credit Guarantee Corporation has been permitted to increase deposit insurance coverage for a depositor, which will now be one lakh to five lakh rupees, per depositor.  The Factor Regulation Act, 2011 will be amended to enable NBFCs to extend invoice financing to MSMEs.  The PFRDA Act will be amended to separate NPS trust for government employees for PFRDAI.   Laws where there is criminal liability for acts that are civil in nature will be examined and amended.  Contracts Act, 1872 will be strengthened to ensure that contracts are honoured.
  • GST Compensation:  GST compensation balances for 2016-17 and 2017-18 will be paid in two instalments.   From now, transfer to GST Compensation Fund will be only through the compensation cess.
  • Disinvestment:  The government will sell a part of its holding in LIC through an Initial Public Offer.   The government also plans to sell the balance of its holding in IDBI Bank.
  • Investment:  Certain specified categories of government securities will be opened fully for non-resident investors.  The limit for Foreign Portfolio Investment in corporate bonds will be increased from 9% to 15% of the outstanding stock of corporate bonds.  It has been proposed to set up an Investment Clearance Cell which will provide “end to end” facilitation and support, such as pre-investment advisory at the central and state level.
  • Commerce and Industry:  A scheme focused on encouraging manufacturing of mobile phones, electronic equipment, and semi-conductor packaging has been proposed.  The National Technical Textiles Mission will be implemented from 2020-21 to 2023-24 with an outlay of Rs 1,480 crore.  A scheme will be launched for the refund of duties and taxes on exported products, which are not getting exempted under any other existing mechanism.
  • Infrastructure and Urban Development:  The government will build 6,500 projects under the National Infrastructure Pipeline.  These projects will include housing, safe drinking water, and healthcare, among others.   A National Logistics Policy will be released which will clarify the roles of the central government, state governments, and key regulators.  Further, it will create a single window e-logistics market.  Five new smart cities will be developed in collaboration with states in public-private partnership mode.
  • Transport and Energy:  Four railway station re-development projects and operation of 150 passenger trains will be done through public-private partnership mode.  The government will encourage states to replace conventional energy meters with prepaid smart meters by 2023.  It has been proposed to expand the national gas grid from 16,200 km to 27,000 km.
  • Agriculture and allied activities:  The government will expand the Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan scheme to help 20 lakh farmers in setting up stand-alone solar pumps.  Viability gap funding will be provided for setting up warehouses at the block level.   All eligible beneficiaries of Pradhan Mantri Kisan Samman Nidhi will be covered under the Kisan Credit Card scheme.   The government will propose comprehensive measures for 100 water stressed districts.
  • Technology:  A policy will be introduced to enable private sector to build data centre parks.  Fibre to the Home connections through Bharatnet will link one lakh gram panchayats in 2020.  A new National Policy on Official Statistics has been proposed which will use latest technology including Artificial Intelligence.  An outlay of Rs 8,000 crore has been proposed for the National Mission on Quantum Technologies and Applications, over a period of five years.
  • Education:  The new National Education Policy will be announced.  Steps will be taken to enable sourcing of External Commercial Borrowings and Foreign Direct Investment for education.  Degree level online education programme will be started by institutions who rank within top 100 in the National Institutional Ranking framework.
  • Health:  Jan Aushadhi Kendra scheme will be expanded to all districts and 2,000 medicines and 300 surgicals will be offered by 2024.  Viability gap funding window has been proposed for setting up hospitals in the public-private partnership mode.
  • Social Justice:  Legislative and institutional changes will be made to ensure that there is no manual cleaning of sewer systems or septic tanks.  Rs 28,600 crore has been allocated for programs specific to women.
  • National Recruitment Agency:  National Recruitment Agency will be set up for recruitment of non-gazetted posts in government and public sector banks.

Budget estimates of 2020-21 as compared to revised estimates of 2019-20

  • Total Expenditure:  The government is estimated to spend Rs 30,42,230 crore during 2020-21.  This is 12.7% more than the revised estimate of 2019-20.  Out of the total expenditure, revenue expenditure is estimated to be Rs 26,30,145 crore (11.9% growth) and capital expenditure is estimated to be Rs 4,12,085 crore (18.1% growth).
  • Total Receipts:     The government receipts (excluding borrowings) are estimated to be Rs 22,45,893 crore, an increase of 16.3% over the revised estimates of 2019-20.  The gap between these receipts and the expenditure will be plugged by borrowings, budgeted to be Rs 7,96,337 crore, an increase of 3.8% over the revised estimate of 2019-20.
  • Transfer to states:     The central government will transfer Rs 13,90,666 crore to states and union territories in 2020-21.  This is an increase of 17.1% over the revised estimates of 2019-20 and includes devolution of (i) Rs 7,84,181 crore to states, out of the centre’s share of taxes, and (ii) Rs 6,06,485 crore in the form of grants and loans.
  • Deficits:  Revenue deficit is targeted at 2.7% of GDP, and fiscal deficit is targeted at 3.5% of GDP in 2020-21.  The target for primary deficit (which is fiscal deficit excluding interest payments) is 0.4% of GDP.
  • GDP growth estimate:  The nominal GDP is estimated to grow at a rate of 10% in 2020-21.  The estimated nominal GDP growth rate for 2019-20 was 12%.

Table 1: Budget at a Glance 2020-21 (Rs crore)

  Actuals
2018-19
Budgeted
2019-20
Revised
2019-20
Budgeted
2020-21
% change
(RE 2019-20 to BE 2020-21)
Revenue Expenditure 20,07,399  24,47,780  23,49,645  26,30,145 11.9%
Capital Expenditure  3,07,714  3,38,569  3,48,907  4,12,085 18.1%
Total Expenditure 23,15,113   27,86,349   26,98,552   30,42,230  12.7%
Revenue Receipts 15,52,916  19,62,761  18,50,101  20,20,926 9.2%
Capital Receipts  1,12,779  1,19,828  81,605  2,24,967 175.7%
of which:          
   Recoveries of Loans  18,052  14,828  16,605  14,967 -9.9%
   Other receipts (including disinvestments)  94,727  1,05,000  65,000  2,10,000 223.1%
Total Receipts (without borrowings) 16,65,695   20,82,589   19,31,706   22,45,893  16.3%
Revenue Deficit  4,54,483  4,85,019  4,99,544  6,09,219 22.0%
% of GDP  2.4   2.3   2.4   2.7   
Fiscal Deficit  6,49,418  7,03,760  7,66,846  7,96,337 3.8%
% of GDP  3.4   3.3   3.8   3.5   
Primary Deficit  66,770  43,289  1,41,741  88,134 -37.8%
% of GDP 0.4 0.2 0.7 0.4  

Note:  Budgeted estimates (BE) are budget allocations announced at the beginning of each financial year.  Revised Estimates (RE) are estimates of projected amounts of receipts and expenditure until the end of the financial year.  Actual amounts are audited accounts of expenditure and receipts in a year.

Sources:  Budget at a Glance, Union Budget Documents 2020-21; PRS.

  • Expenses which bring a change to the government’s assets or liabilities (such as construction of roads or recovery of loans) are capital expenses, and all other expenses are revenue expenses (such as payment of salaries or interest payments).
  • In 2020-21, capital expenditure is expected to increase by 18.1 % over the revised estimates of 2019-20, to Rs 4,12,085 crore.  On the other hand, revenue expenditure is expected to increase by 11.9% over the revised estimates of 2019-20 to Rs 26,30,145 crore.
  • From 2010-11 to 2020-21, capital expenditure had an annual average growth of 10.2%, while revenue expenditure had an annual average growth of 9.7%.
  • Disinvestment is the government selling its stakes in Public Sector Undertakings (PSUs).  In 2019-20, the government is estimated to meet 62% of its disinvestment target.  The disinvestment target for 2020-21 has been set at Rs 2,10,000 crore.

Receipts Highlights for 2020-21

  • Total receipts (including borrowings) in 2020-21 are estimated to be Rs 30,42,230 crore and net receipts (excluding borrowings) to be Rs 22,45,893 crore.  Receipts (without borrowings) are estimated to increase by 16.3% over the revised estimates of 2019-20.
  • Gross tax revenue is budgeted to increase by 12% over the revised estimates of 2019-20, which is higher than the estimated nominal GDP growth of 10% in 2020-21.     The net tax revenue of the central government (excluding states’ share in taxes) is estimated to be Rs 16,35,909 crore in 2020-21.
  • Devolution to states from centre’s tax revenue is estimated to be Rs 7,84,181 crore in 2020-21.  In 2019-20, the devolution to states reduced by 19% from an estimate of Rs 8,09,133 crore at the budgeted stage to Rs 6,56,046 crore at the revised stage.     
  • Non-tax revenue is expected to be Rs 3,85,017 crore in 2020-21.     This is 11.4% higher than the revised estimate of 2019-20.
  • Capital receipts (without borrowings) are budgeted to increase by 175.7% over the revised estimates of 2019-20.  This is on account of disinvestments, which are expected to be Rs 2,10,000 crore in 2020-21, as compared to Rs 65,000 crore as per the revised estimates of 2019-20.

Table 2: Break up of central government receipts in 2020-21 (Rs crore)

  Actuals
2018-19
Budgeted
2019-20
Revised
2019-20
Budgeted
2020-21
% change
(RE 2019-20 to BE 2020-21)
Gross Tax Revenue  20,80,465   24,61,195   21,63,423   24,23,020  12.0%
of which:          
Corporation Tax  6,63,572  7,66,000  6,10,500  6,81,000 11.5%
Taxes on Income  4,73,003  5,69,000  5,59,500  6,38,000 14.0%
Goods and Services Tax  5,81,560  6,63,343  6,12,327  6,90,500 12.8%
Customs  1,17,813  1,55,904  1,25,000  1,38,000 10.4%
Union Excise Duties  2,31,982  3,00,000  2,48,012  2,67,000 7.7%
Service Tax  6,904  –  1,200  1,020
A. Centre’s Net Tax Revenue  13,17,211   16,49,582   15,04,587   16,35,909  -0.8%
Devolution to States 7,61,454 8,09,133 6,56,046 7,84,181 19.5%
B. Non Tax Revenue  2,35,704   3,13,179   3,45,513   3,85,017  11.4%
of which:          
Interest Receipts  12,145  13,711  11,027  11,042 0.1%
Dividend and Profits  1,13,420  1,63,528  1,99,893  1,55,395 -22.3%
Other Non-Tax Revenue  1,10,139  1,35,940  1,34,593  2,18,580 62.4%
C. Capital Receipts (without borrowings)  1,12,779   1,19,828   81,605   2,24,967  175.7%
of which:          
Disinvestment  94,727  1,05,000  65,000  2,10,000 223.1%
Receipts (without borrowings) (A+B+C) 16,65,694 20,82,589 19,31,705 22,45,893 16.3%
Borrowings  6,49,418   7,03,760   7,66,846   7,96,337  3.8%
Total Receipts (including borrowings) 23,15,113              27,86,349         26,98,552               30,42,230  12.7%

Sources:  Receipts Budget, Union Budget Documents 2020-21; PRS.

  • Indirect taxes:  The total indirect tax collections are estimated to be Rs 10,96,520 crore in 2020-21.  Of this, the government has estimated to raise Rs 6,90,500 crore from GST.  Out of the total tax collections under GST, 84% is expected to come from central GST (Rs 5,80,000 crore), and 16% (Rs 1,10,500 crore) from the GST compensation cess.
  • Corporation tax:  The collections from taxes on companies are expected to increase by 11.5% in 2020-21 to Rs 6,81,000 crore.  The revised estimates of 2019-20 indicate a 20.3% shortfall in collections from corporation tax over the budget estimates of 2019-20.  This shortfall may be due to a cut in the corporate tax rates made earlier during the financial year.
  • Income tax:  The collections from income tax are expected to increase by 14% in 2020-21 to Rs 6,38,000 crore.  The 14% growth is despite a reduction in tax rates.  That is, income tax is estimated to grow at 21%, if not for the Rs 40,000 crore revenue foregone due to the reduction in tax rates.
  • Non-tax receipts:  Non-tax revenue consists of interest receipts on loans given by the centre, dividends and profits, external grants, and receipts from general, economic, and social services, among others.   Non-tax revenue is expected to increase by 11.4% over the revised estimates of 2019-20 to Rs 3,85,017 crore.
  • Disinvestment target:  The disinvestment target for 2020-21 is Rs 2,10,000 crore.   This target is 223.1% higher than the revised estimate of 2019-20 (Rs 65,000 crore).

Expenditure Highlights for 2020-21 

  • Total expenditure in 2020-21 is expected to be Rs 30,42,230 crore, which is 12.7% higher than the revised estimate of 2019-20.     Out of this, (i) Rs 8,31,825 crore is proposed to be spent on central sector schemes (7.6% increase over the revised estimate of 2019-20), and (ii) Rs 3,39,894 crore is proposed to be spent on centrally sponsored schemes (7.3% increase over the revised estimate of 2019-20).
  • The government is expected to spend Rs 2,10,682 crore on pensions in 2020-21, which is 14.4% higher than the revised estimate of 2019-20.  In addition, expenditure on interest payments in 2020-21 is expected to be Rs 7,08,203 crore, which is 23% of the government’s expenditure.

Table 3: Break up of central government expenditure in 2020-21 (Rs crore)

  Actuals
2018-19
Budgeted
2019-20
Revised
2019-20
Budgeted
2020-21
% change
(RE 2019-20 to BE 2020-21)
Central Expenditure  
Establishment Expenditure of Centre  5,21,247  5,46,296  5,67,133  6,09,585 7.5%
Central Sector Schemes  6,38,495  8,70,794  7,73,196  8,31,825 7.6%
Other expenditure  6,77,403  7,72,129  7,41,553  8,87,574 19.7%
Centrally Sponsored Schemes 

and other transfers

         
Centrally Sponsored Schemes  2,96,029  3,31,610  3,16,816  3,39,894 7.3%
Finance Commission Grants  93,704  1,20,466  1,23,710  1,49,925 21.2%
of which:          
Rural Local Bodies  35,064  52,558  58,616  69,925 19.3%
Urban Local Bodies  14,400  23,359  25,843  30,000 16.1%
Grants-in-aid  9,658  10,344  10,938  20,000 82.9%
Post Devolution Revenue Deficit Grants  34,582  34,206  28,314  30,000 6.0%
Other grants  88,235  1,45,054  1,76,144  2,23,427 26.8%
Total Expenditure  23,15,113   27,86,349   26,98,552   30,42,230  12.7%

Sources:  Budget at a Glance, Union Budget Documents 2020-21; PRS.

Expenditure on Subsidies

In 2020-21, the total expenditure on subsidies is estimated to be Rs 2,62,109 crore, a decrease of 0.5% from the revised estimate of 2019-20.  This is largely due to a decrease in expenditure on fertiliser subsidy.   Details are given below:

  • Food subsidy:  Allocation to food subsidy is estimated at Rs 1,15,570 crore in 2020-21, a 6.3% increase as compared to the revised estimate of 2019-20.  In 2019-20 budget, Rs 1,84,220 crore was allocated to food subsidy.  However, the revised estimate is much lower than the budgeted estimate at Rs 1,08,688 crore.  This is due to a 41% cut (Rs 75,532 crore in amount) in the allocation to food subsidy for 2019-20 from the budgeted stage to the revised stage.
  • Fertiliser subsidy:  Expenditure on fertiliser subsidy is estimated at Rs 71,309 crore in 2020-21.  This is a decrease of Rs 8,689 crore (10.9%) from the revised estimate of 2019-20.
  • Petroleum subsidy:   Expenditure on petroleum subsidy is estimated to increase by 6.1% to Rs 40,915 crore in 2020-21.  Petroleum subsidy consists of subsidy on LPG (Rs 37,256 crore) and kerosene subsidy (Rs 3,659 crore).  In 2020-21, while the LPG subsidy is estimated to increase by Rs 3,170 crore over the previous year, kerosene subsidy is estimated to decrease by Rs 824 crore.
  • Other subsidies:   Expenditure on other subsidies includes interest subsidies for various government schemes, subsidies for the price support scheme for agricultural produce, and assistance to state agencies for procurement, among others.  In 2020-21, the expenditure on these other subsidies has decreased by Rs 1,987 crore (5.5%) over the revised estimate of 2019-20.  Table 4 provides details of subsidies in 2020-21.

Table 4: Subsidies in 2020-21 (Rs crore)

  Actuals
2018-19
Budgeted
2019-20
Revised
2019-20
Budgeted

2020-21

% change
(RE 2019-20 to BE 2020-21)
Food subsidy 1,01,327 1,84,220 1,08,688 1,15,570 6.3%
Fertiliser subsidy 70,605 79,996 79,998 71,309 -10.9%
Petroleum subsidy 24,837 37,478 38,569 40,915 6.1%
Other subsidies 26,185 36,460 36,302 34,315 -5.5%
Total 2,22,954 3,38,154 2,63,557 2,62,109 -0.5%

Sources: Expenditure Profile, Union Budget 2020-21; PRS.

Expenditure by Ministries 

The ministries with the 13 highest allocations account for 53% of the estimated total expenditure in 2020-21.   Of these, the Ministry of Defence has the highest allocation in 2020-21, at Rs 4,71,378 crore.  It accounts for 15% of the total budgeted expenditure of the central government.  Other Ministries with high allocation include: (i) Home Affairs, (ii) Agriculture and Farmers’ Welfare, (iii) Consumer Affairs, Food and Public Distribution, and (iv) Rural Development.  Table 5 shows the expenditure on Ministries with the 13 highest allocations for 2020-21 and the changes in allocation as compared to the revised estimate of 2019-20.

Table 5: Ministry-wise expenditure in 2020-21 (Rs crore)

  Actuals
2018-19
Budgeted
2019-20
Revised
2019-20
Budgeted

2020-21

% change
(RE 2019-20 to BE 2020-21)
Defence 4,03,457 4,31,011 4,48,820 4,71,378 5.0%
Home Affairs 1,12,189 1,19,025 1,39,108 1,67,250 20.2%
Agriculture and Farmers’ Welfare 53,620 1,38,564 1,09,750 1,42,762 30.1%
Consumer Affairs, Food and Public Distribution 1,08,848 1,94,513 1,17,290 1,24,535 6.2%
Rural Development 1,13,706 1,19,874 1,24,549 1,22,398 -1.7%
Human Resource Development 80,345 94,854 94,854 99,312 4.7%
Road Transport and Highways 77,301 83,016 83,016 91,823 10.6%
Communications           35,395            38,637            35,749            81,957 129.3%
Railways 54,913 68,019 69,967 72,216 3.2%
Chemicals and Fertilisers           71,414            80,534            80,968            71,897 -11.2%
Health and Family Welfare           54,682            64,559            64,609            67,112 3.9%
Housing and Urban Affairs           40,612            48,032           42,267            50,040 18.4%
Petroleum and Natural Gas           32,371            42,901            42,901            42,901 0.0%
Other Ministries       10,76,261       12,62,809       12,44,703       14,36,648 13.8%
Total Expenditure 23,15,113 27,86,349 26,98,552 30,42,230 12.7%

Note:   Expenditure is net of recoveries such as fines, and ticket sales.

Sources:  Expenditure Budget, Union Budget 2020-21; PRS.

  • Ministry of Home Affairs:  Allocation to the Ministry of Home Affairs increased by Rs 28,142 crore (20.2%) in 2020-21, over the revised estimate of 2019-20.  This is mainly on account of grants provided by the Ministry to the newly formed union territories of Jammu and Kashmir (Rs 30,757 crore), and Ladakh (Rs 5,958 crore).
  • Ministry of Communications:   Allocation to the Ministry of Communications increased by Rs 46,208 crore (129.3%) in 2020-21, over the revised estimate of 2019-20.  This is mainly on account of capital infusion of Rs 20,410 crore in BSNL and MTNL for 4G spectrum, and Rs 13,184 crore of grants provided to them for Voluntary Retirement Scheme.
  • Ministry of Agriculture and Farmers’ Welfare:  Allocation to the Ministry of Agriculture and Farmers’ Welfare increased by 30.1% to Rs 1,42,762 crore in 2020-21 over the previous year.  This is primarily due to an increase of Rs 20,630 crore in allocation to the PM-KISAN scheme.  In 2019-20, the Ministry was allocated Rs 1,38,564 crore, which has been revised down by 21% to Rs 1,09,750 crore (due to Rs 20,630 crore of estimated underspending in PM-KISAN).
  • Ministry of Consumer Affairs, Food and Public Distribution:  Allocation to the Ministry increased by Rs 7,245 crore (6.2%) over the previous year.  In 2019-20, the Ministry was expected to spend Rs 1,94,513 crore, which has been revised down by 40% to Rs 1,17,290 crore (due to Rs 75,532 crore cut in allocation to the food subsidy).

Expenditure on Major Schemes

 Table 6: Scheme wise allocation in 2020-21 (Rs crore)

  Actuals
2018-19
Budgeted
2019-20
Revised
2019-20
Budgeted

2020-21

% change
(RE 2019-20 to BE 2020-21)
PM-KISAN 1,241 75,000 54,370 75,000 37.9%
MGNREGS 61,815 60,000 71,002 61,500 -13.4%
National Education Mission 30,830 38,547 37,672 39,161 4.0%
National Health Mission 31,502 33,651 34,290 34,115 -0.5%
Integrated Child Development Services 21,642 27,584 24,955 28,557 14.4%
Pradhan Mantri Awas Yojana 25,443 25,853 25,328 27,500 8.6%
Pradhan Mantri Gram Sadak Yojana 15,414 19,000 14,070 19,500 38.6%
Pradhan Mantri Fasal Bima Yojana 11,937 14,000 13,641 15,695 15.1%
AMRUT and Smart Cities Mission 12,085 13,750 9,842 13,750 39.7%
Green Revolution 11,758 12,561 9,965 13,320 33.7%
Swachh Bharat Mission 15,374 12,644 9,638 12,294 27.6%
National Rural Drinking Water Mission 5,484 10,001 10,001 11,500 15.0%
Pradhan Mantri Krishi Sinchai Yojana 8,143 9,682 7,896 11,127 40.9%
Mid-Day Meal Programme 9,514 11,000 9,912 11,000 11.0%
National Livelihood Mission 6,282 9,774 9,774 10,005 2.4%

Sources: Expenditure Profile, Union Budget 2020-21; PRS.

  • Among schemes, the PM-KISAN scheme (income support to farmers) has the highest allocation in 2020-21 at Rs 75,000 crore.   Allocation to the scheme has increased by 37.9% from the revised estimate of 2019-20.  However, in 2019-20, allocation to the scheme has been cut by Rs 20,630 crore (28%) from the budgeted stage to the revised stage.   In 2018-19, expenditure on the scheme saw a 94% cut, from an estimate of Rs 20,000 crore at the revised stage to an actual expenditure of Rs 1,241 crore.
  • The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has the second highest allocation in 2020-21 at Rs 61,500 crore.  This is a decrease of Rs 9,502 crore (13.4%) from the revised estimate of 2019-20.  In 2019-20, allocation to the scheme has increased by 18% from Rs 60,000 crore at the budgeted stage to Rs 71,002 crore at the revised stage.
  • Allocation to the Pradhan Mantri Gram Sadak Yojana has increased by 38.6% over the revised estimate of 2019-20 to Rs 19,500 crore.   In 2019-20, allocation to the scheme has been cut by Rs 4,930 crore (26%) from the budgeted stage to the revised stage.

Expenditure on Scheduled Caste and Scheduled Tribe sub-plans and schemes for welfare of women, children and NER 

  • Programmes for the welfare of women and children have been allocated Rs 2,39,504 crore in 2020-21, an increase of 3.9% over the revised estimate of 2020-21.  These allocations include programmes under all the ministries.
  • The sub-plans for Scheduled Castes and Scheduled Tribes have been allocated a total of Rs 1,36,909 crore in 2020-21, a 12% increase over the revised estimate of 2019-20.

Table 7:  Allocations for women, children, SCs, STs and NER (Rs crore) 

  Budgeted
2019-20
Revised
2019-20
Budgeted 2020-21 % change
(RE 2019-20 to BE 2020-21)
Welfare of Women  1,36,934 1,42,813   1,43,462 0.5%
Welfare of Children     91,644    87,642      96,042 9.6%
Scheduled Castes     81,341   72,936      83,257 14.1%
Scheduled Tribes     52,884    49,268      53,653 8.9%
North Eastern Region (NER)      59,370   53,374      60,112 12.6%

Sources: Expenditure Profile, Union Budget 2020-21; PRS.

Fiscal Responsibility and Budget Management targets

The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 requires the central government to progressively reduce its outstanding debt, revenue deficit and fiscal deficit.  The central government gives three year rolling targets for these indicators when it presents the Union Budget each year.  Table 8 shows the targets for revenue deficit and fiscal deficit as given in the Medium Term Fiscal Policy Statement.

Table 8: FRBM targets for deficits (as % of GDP)

Actuals
2018-19
Revised
2019-20
Budgeted
2020-21
Target
2021-22
Target
2022-23
Fiscal Deficit 3.4% 3.8% 3.5% 3.3% 3.1%
Revenue Deficit 2.4% 2.4% 2.7% 2.3% 1.9%

Sources: Medium Term Fiscal Policy Statement, Union Budget 2020-21; PRS.

Fiscal deficit is an indicator of borrowings by the government for financing its expenditure.     The estimated fiscal deficit for 2020-21 is 3.5% of GDP.

Revenue deficit is the excess of revenue expenditure over revenue receipts.  Such a deficit implies the government’s need to borrow funds to meet expenses which may not provide future returns.  The estimated revenue deficit for 2020-21 is 2.7% of GDP.

Primary deficit is the difference between fiscal deficit and interest payments.  It is estimated to be 0.4% of GDP in 2020-21.

Extra-Budgetary Resources:  In addition to the expenditure shown in the budget, the government also spends through extra-budgetary resources.  These resources are raised by issuing bonds and through loans from the National Small Savings Fund (NSSF).  In 2020-21, the government estimates an expenditure of Rs 1,86,100 crore through such extra-budgetary resources.  This includes an expenditure of Rs 1,36,600 crore by the Food Corporation of India financed through loans from NSSF.

Since funds borrowed for such expenditure remain outside the budget, they do not get factored in the deficit and debt figures.   If borrowings made in the form of extra-budgetary resources are also taken into account, the fiscal deficit estimated for the year 2020-21 would increase from 3.5% of GDP to 4.4% of GDP.  Similarly, the fiscal deficit for the year 2019-20 would increase from 3.8% of GDP to 4.6% of GDP due to extra-budgetary borrowings of Rs 1,72,699 crore.

Source: prsindia.org

102 Digital Dispensaries to kick-start in Odisha

January 28, 2019 Leave a comment

Odisha government signed an MoU with Glocal Healthcare Systems for management and operation of 102 digital dispensaries across 23 districts on 22 January 2019. more…

Categories: Healthcare

Cabinet approves utilisation of land to Tata Steel to set up industrial park

June 25, 2018 Leave a comment

The Odisha cabinet on 21 June 2018, cleared a proposal by Tata Steel for utilisation of 1,735 acres of land for developing a private industrial park at Gopalpur, in Ganjam district. more

 

Odisha to set up hospitals on PPP mode

June 25, 2018 Leave a comment

In a major boost to the healthcare sector, the government of Odisha has decided to set up 20 new hospitals in PPP mode across the state. more

Odisha gets 74 industrial projects worth more than Rs. 2 lakh crore

July 27, 2017 Leave a comment

The Odisha Government is currently pursuing 74 industrial projects entailing an investment of more than Rs. 2 lakh crore and it will give a big boost…more

Categories: Other Services

Union Petroleum Minister performs ground breaking ceremony of LNG Terminal at Dhamra port

July 9, 2017 Leave a comment

The ground breaking ceremony for the Rs 6,000 crore- LNG import terminal at Dhamra port in Odisha has been performed by Union Petroleum Minister Mr Dharmendra Pradhan.

 

The 5 million tonne per annum capacity LNG terminal will cater to transport gas through a 2,539 km long network of pipeline that would be laid with an investment of Rs 13,000 crore. The proposed multi-state pipeline network would connect 13 districts of Odisha and states like Jharkhand and Uttar Pradesh.

 

The gas infrastructure project is likely to boost economic growth of Odisha.

 

 

 

Tender for Coal Mining Block Floated

December 24, 2015 Leave a comment

The state government has floated tender for the Ghorhaburhani-Sagasahi Iron Ore Block in the state. The last date for submission of tender document is February 10, 2016.

Mining Tender

Categories: Mining

Realty Boom in Odisha

February 27, 2015 Leave a comment

InfocityReal estate is blossoming in Odisha with the major IT players setting up their base (development centres) especially in Bhubaneswar and its outskirts. Players like Tata, Mahindra, Infosys, Wipro have setup their base in the Infocity park, Bhubaneswar. Many international BPOs, Multi-national Banks, etc have also establishing their offices/bases in Bhubaneswar.

Bhubaneswar

Bhubaneswar is an emerging city, situated 50km away from Bay-of-Bengal. It is the capital of Odisha and the largest city in the state. The city is termed as temple city and is a centre of religious importance. The city together with Puri and Konark forms a (Swarna Tribhuja) golden triangle is the most favourable tourist destination in India.

The infrastructure development of the city is entrusted upon Bhubaneswar Development Authority (BDA), created by the state government during 1983. The objective of BDA is to take up planned and systematic development of Bhubaneshwar Development Plan Area (BDPA). The authority had prepared a blue print to develop the city with a Comprehensive Development Plan in 2010 (CDP) with a vision to create a world class city that will not only have high end activities and centers of excellence, but also will have a distinct identity based on its rich cultural background and natural resources. The Authority has chalked out an ambitious Rs 29,500 crore investment under CDP.

The Comprehensive Development Plan has emphasized for development of new housing colonies and new Integrated Townships in the extensive development zones. The Authority has taken steps to develop a Satellite Township over an area of about 1200 acre in Jagasara, Jagasarapatna and Madanpur mouza of the BDPA. The IL&FS IDC has been engaged as Consultant/Advisor to this project. This integrated township will provide housing to around one lakh of population.

Bhubaneswar and its outskirts are developing at a faster pace. The adjoining locations like Jatni, Patia, Nandankanan Road, Rasulgarh, Cuttack Road is rapidly growing with many leading realty projects are under development stage. Many leading developers like, DLF, Utkal Builders, new entrants like Trishna Real Estate Pvt. Ltd. are developing realty projects across the city.

Metro Satellite City by DLF Group


DLFDLF group
is developing Metro Satellite City Phase-III at Naharakanta/Rudrapur, in Bhubaneswar is claimed by the group as the largest private colony in the state. The township project is entirely eco-friendly and having 300 duplex and 250 apartments, is equipped with shopping center, temple, state level indoor badminton court, own doctors clinic, Joggers Park, gymnasium et al.

The project is being developed with Ample Greenery, scientifically done by Green Thumb India, a Pune based firm. It has its own sewerage system from a Singapore based plant.

Metro Highway is another residential project being developed by the group at Phala, Bhubaneswar. The project is having different types of floor planning with different floor area.

DLF is planning an ambitious project “Metro Palms International” a high end business complex that will be cynosure in the country. The dream project will have the highest standards of IT/ITES buildings in this country where the business conglomerates can land in style for their meetings. This will provide high-end retail space for the connoisseurs.

TSL Spring City

TSL Spring City is “Trishna Skyscrapper Ltd’s” a Kolkatta based real estate developer’s maiden project in Odisha, coming up in the state capital, Bhubaneswar. The project is an integrated township spanning across 32 acre land coming up in the periphery of Bhubaneswar Development Authority in the lap of nature. The project is located in Kantabada, adjacent to National highway, and will have all modern amenities suitable to the budget of every common man.

Railway Budget: 2015-16 Highlights

February 26, 2015 Leave a comment

Highlights of Railway budget 2015-16

* Regulatory mechanism to be set up for deciding on tariff and disputes: Project worth Rs 2,500 crore using BOT annuity route to be launched
* Joint ventures with states to develop railway projects
* Systems audit proposed for all railway departments
* Feasibility report of high speed train between Mumbai and Ahmedabad expected by mid-2015
* Preparing 5-year corporate safety plan to be ready in 3 months to identify annual quantifiable targets
* Rs 6,750 crore allocated for eliminating 3438 level crossings; 970 road-underbridge and road-overbridge to be constructed
* More general class coaches to be added in identified trains; more AC EMU services for Mumbai suburban section.
* More general class coaches to be added in identified trains; more AC EMU services for Mumbai suburban section.
* Open wi-fi to be available at 400 railway stations; proposal to revamp the station re-development scheme
* Projects worth Rs 96,182 crore to expand capacity of 9,420 km rail lines.
* Tickets can now be booked 120 days ahead of travel date, instead of 60 days now, to tackle tout menace, says Railway Minister.
* Four dedicated freight corridors to be completed this year; 6608 kms of track to be electrified
* Wagon-making scheme to be reviewed to make it easier for private investment; Speed on nine corridors to be increased from 110-130 to 160-200 kms per hour
* Investment of Rs 8.50 lakh crore envisaged over the next five years
* Priority to improve capacity on high density network in next five years
* Railways to go through transformation in five years; to increase track capacity by 10 per cent to 1.38 lakh km.
* Railways to partner with private sector, PSUs and multilateral funding institutions
* Investment of Rs 8.50 lakh crore envisaged over the next five years
* People of India will own railways always; Railways will continue to be precious national asset
* Investment of Rs 8.50 lakh crore envisaged over the next five years
Railway helpline number 138 will become operational 24×7
Disposable linen on payment to be available at all stations.
Toll free number 182 created for security related complaints
Rail-cum-road ticket to be extended to many stations; more trains to be added under scheme for ordering food while booking tickets
We are introducing ‘Operation 5-minute’ to ensure ticketless passenger get regular ticket within five minute of entering station
SMS alert service to be introduced on train arrival/ departure; CCTVs to be introduced in select trains and suburban trains for women safety.

Full Speech of Railway Minister: Railway Budget 2015-16

February 26, 2015 Leave a comment

rail-minister

Railway Minister Suresh Prabhu in his maiden Rail Budget (2015-16) announced a record investment plan of over Rs. 1 lakh crore in 2015-16 while sparing the passengers of a fare hike.

Here’s the full text of Mr Prabhu’s Rail Budget Speech:

Madam Speaker,

1. I rise to present before this August House the Statement of Estimated Receipts and Expenditure for 2015-16 for Indian Railways.

2. At the outset, let me thank the Hon’ble Prime Minister, Shri Narendra Modi ji, for infusing all Indians with a renewed sense of pride and refreshed the dream of prosperous nation. At a more personal level, I wish to express my gratitude towards him for giving me this opportunity to serve the people of India through the medium of Railways which is his priority. The Prime Minister established the principle of governance when he asked what government was for if not for the welfare of the poor. He challenged us with an inspirational objective when he said that the age of poverty alleviation was over and that the era of poverty elimination had begun. Indian Railways will play its part in this historic mission.

3. Madam Speaker, the railway map of India is a network of veins that pump life-giving blood into the heart of India’s economy. Indian Railways is a unique integrator of modern India, with a major role in its socio-economic development. It is an organization that touches the hearts and existence of all Indians, even Mahatma Gandhi. Bapu decided to undertake a voyage of discovery of India before launching himself into the national freedom movement. And he conducted this Bharat Darshan on trains, always travelling in third class.

4. Unfortunately, Railway facilities have not improved very substantially over the past few decades. A fundamental reason for this is the chronic underinvestment in Railways, which has led to congestion and over-utilization. As a consequence, capacity augmentation suffers, safety is challenged and the quality of service delivery declines, leading to poor morale, reduced efficiency, sub-optimal freight and passenger traffic, and fewer financial resources. This again feeds the vicious cycle of under-investment.

5. This cycle must be put to an end. Once it does, the gains to the economy will be immense: better services, improved connectivity for all citizens including the poorer segments of our society, lower costs and improved competitiveness. Investment in the Railways will have a large multiplier effect on the rest of the economy and will create more jobs in the economy for the poor. Investment in Indian Railways is also necessary for environmental sustainability and well being of future generations.

6. Madam Speaker, the Indian Railways carry a heavy burden of expectations. Citizens who demand better railway services are often not aware of the constraints that the Railways operate under. I wish to flag two; there are 1219 sections on the high-density network, which can be roughly equated with tracks connecting the metros. Out of these, 492 are running at a capacity of more than 100% and there are another 228 that are running at a capacity of between 80% and 100%. If a section is over-stretched, the entire line is over-stretched. There is no slack available for maintenance and train speeds slow down. On a single track, the Indian Railways have to run fast express trains like Rajdhani and Shatabdi, ordinary slow passenger trains as well as goods trains. Is it surprising that though Rajdhani and Shatabdi are capable of doing 130 km/hour, the average speed does not exceed 70? Is it surprising that the ordinary passenger train or a goods train cannot average more than around 25 km/hour?

7. In the next five years, our priority will be to significantly improve capacity on the existing high-density networks. Improving capacity on existing networks is cheaper. There are no major land acquisition issues and completion time is shorter.

The emphasis will be on gauge conversion, doubling, tripling and electrification. Average speed will increase. Trains will become more punctual. Goods trains can be timetabled.

8. I am reminded of a novel by Shubhada Gogate titled ‘Khandalyachya Ghatasaathi’.
The novel is a fictionalized account of India’s first railway line  being constructed crossing the Sahyadri range. You build a section at a time. You build a tunnel at a time. You then move on to the next section and the next tunnel. You build bit by bit. We must restore the strength of Bhartiya Rail as the backbone of our country’s transportation infrastructure.  Bhartiya Rail must substantially regain the market share of freight transport. Rail transport must be made reliable, comfortable and safe and benchmarked to global standards.

I am convinced we can deliver. But we cannot deliver overnight. We will build bit by bit, incrementally. The legacy of past decades will take some time to neutralize.

9. I believe that good governance emerges out of participative government. In a very short span of time I have visited most of the states; tried to interact with many employees, stakeholders and customers. I took the initiative to connect directly with the users through social media. I am glad to inform that over 20000 suggestions were received and we have already started working on the feasible ones. You may also find some incorporated in this budget. This experiment gave me an insight into how involved people are with the Railways and their will to see it getting better and reaffirming its position as the growth engine of this country.

10.We have prepared a forward-looking agenda. Over the next five years, IR has to go through a transformation. We have fixed four goals for ourselves.

a) To deliver a sustained and measurable improvement in customer experience.
We are launching initiatives that will systematically address customer concerns about cleanliness, comfort, accessibility, service quality and speed of trains.
b) To make Rail a safer means of travel.
c) To expand Bhartiya Rail’s capacity substantially and to modernise infrastructure.
Given the importance of rail travel for our citizens we will increase our daily passenger carrying capacity from 21million to 30 million. We will also increase track length by 20% from 1,14,000 km to 1,38,000 km, and we will grow our annual freight carrying capacity from 1 billion to 1.5 billion tonnes.
d) Finally, to make Bhartiya Rail financially self-sustainable. This will mean generating large surpluses from our operations not only to service the debt needed to fund our capacity expansion, but also to invest on an on-going basis to replace our depreciating assets.
This will require material improvement in operating efficiency, tighter control over costs, greater discipline over project selection and execution, and a significant boost to Railways’ revenue generating capacity.

11.These goals will also ensure that Railways is an integral part of all the flagship programmes that our Prime Minister has launched for improving the quality of life of the downtrodden, from Swachh Bharat to Make in India, and from Digital India to Skill India.

12.How will we achieve this? Our execution strategy will have five drivers:
a) Adopting a medium-term perspective: Any organization must address short-term priorities without glossing over the long-term and medium-term vision. As Vinoba Bhave once said, “You will stumble if you look close to your heels and would certainly fall if you ignore the  ision of the long road.” Madam Speaker, this Railway Budget is part of a trilogy of documents that chart out our vision for the future. The first in the series is the White Paper that has been placed today for the information of the House. The second part is today’s Budget for the year 2015-16. This will be followed by a Vision-2030 document that we intend to bring out later this year. The proposals contained in this Budget should, therefore, be seen as the beginning of a Five Year Action Plan to transform the Railways.

b) Building Partnerships: Transforming the Railways will require us to partner with the key stakeholders.

First, consistent with the Prime Minister’s vision of cooperative federalism, we will work closely with the States to make the Railways the backbone of national connectivity. Their economies and citizens will benefit dramatically from an improved railway system. The voice of the locals will reverberate through the State Governments in the planning and execution of railway projects. They will also be able to raise financing through special purpose vehicles that we will create with them. Most of them have already expressed a keen interest to make the improvement of the Railways a joint endeavour and a shared success. Second, we will partner with PSUs to ensure that sufficient capacity is built to transport critical commodities like coal, iron ore, and cement, etc., from where they are extracted or imported to where they are consumed or processed.
Third, we will partner with multilateral and bi-lateral organizations and other governments to gain access to long term financing and technology from overseas. Finally, we will partner with the private sector to improve last mile connectivity, expand our fleet of rolling stock and modernize our station infrastructure.
Here I must mention that Rail will continue to be our precious national asset. It will continue to serve the common man. The people of India will always own Railways.

c) Leveraging additional resources: Over the next five years, we envisage an investment of Rs. 8.5 lakh crore. A broad indicative five-year investment plan is attached as Annex 1 to the speech. Budgetary support is the quickest and easiest option to finance the plan but the Ministry of Finance also faces challenges of competing demands although a small initial contribution to Railways can be catalytic. But the  scale of our investment needs is such that it will require us to seek  ultiple sources of funding. We will tap other sources of finance. Multilateral development banks and pension funds have expressed keen interest in financing new investments. Their time horizon is aligned with ours. They seek sources of predictable and recurring revenue, which we can provide through the issuance of long-term debt instruments to fund revenue generating railway projects.

d) Revamping management practices, systems, processes, and re-tooling of human resources: To get the most out of the additional resources that we will be investing, we will need to ensure the highest standards of operational and business efficiency. I am happy to report an improvement on our financial performances in the year 2014-15 relative to what we had anticipated earlier. I propose the operating ratio for 2015-16 at 88.5% as against a targeted operating ratio of 91.8%in 2014-15 and 93.6% in 2013-14. I am pleased to state that not only will this be the best operating ratio in the last 9 years but the best after the VIth Pay Commission.
The Railways will not be able to deliver sustained improvement in operating efficiency unless changes are made to speed up decision making, tighten accountability, and improve management information systems.
Our people are our biggest asset. Even in the short term that I have held this portfolio I have seen the enthusiasm and dedication of Railway personnel across the country. For our transformation journey to succeed it will be very important to harness the talent of our employees through training and development.

e) Setting standards for Governance and Transparency: The Railways belongs to the whole nation. Its functioning must conform to the highest standards of governance and transparency. Indian Railways’ decisions must be fair to all our stakeholders; from our poorest customers, to our employees and our business partners. My first decision as a minister was to delegate all my tender approving powers to the level of general managers.
Transparency has many dimensions. It requires better quality of information gathering within that system and improved norms for disclosure of that information. It requires reduction of discretion and standardization of procedures. It requires accountability. Studies have shown that greater transparency and accountability are pro-poor instruments, since the relatively poor suffer more from lack of transparency. Apart from delegation of powers, I am proposing to undertake measures with a view to bringing in transparency in the day-to-day activities benefitting the common man.

13.Let me now turn to the details of eleven major thrust areas of our action plan:
A. Quality of life in journeys:

14.I have not increased the passenger fares. We are directing our efforts to make travel on Indian Railways a happy experience with a mix of various initiatives.

Cleanliness
15.Cleanliness is a major area of dissatisfaction. Ensuring higher standards of cleanliness is of utmost priority for us. We want to make Swachh Rail the driving force behind this Government’s flagship programme – Swachh Bharat Abhiyan. Hence, we now work on-Swachh Rail Swachh Bharat.

16.We propose to create a new department for keeping our stations and trains clean. Integrated cleaning will be taken up as a specialized activity, which will include engaging professional agencies and also training our staff in the latest cleaning practices. Railways plan to set up ‘waste to energy’ conversion plants near major coaching terminals to dispose waste in an environment-friendly manner. One pilot plant will be set up, to begin with, followed by more plants in a phased manner.

17.The condition of toilet facilities in our stations and trains needs major improvement. We will build new toilets covering 650 additional stations compared to 120 stations last year. Bio-toilets are being fitted in coaches. So far we have replaced the existing toilets with 17,388 bio toilets. This year we intend to replace another 17,000 toilets. Research, Design and Standards Organisation (RDSO) has also been tasked with making available within a period of six months a design for vacuum toilets.

18.Even as the quality of Indian Railways’ On-board Housekeeping Service (OBHS), presently available in 500 pairs of trains, is being re-looked to make it more effective, we will take simple steps immediately to address customer concerns. The feasibility of a disposable bag along with bedroll for the purpose of collecting their garbage is being considered. The coverage of built in dustbins will be extended to non-AC coaches as well.

19.I take this opportunity to appeal to my fellow citizens that Indian Railways is your travelling home! Please help us to keep it clean.

Bed linen
20.We will launch a programme to improve design, quality and cleanliness of bed linen within the next six months. We have approached NIFT, Delhi for designing bed linen.

Additionally, the facility of online booking of disposable bedrolls at select stations is being extended to all passengers through the IRCTC portal on payment basis. We will increase the number of mechanized laundries.

Help-line
21.Every responsive organization should have a system to address grievances from its valued customers. An all India 24X7 helpline number, 138, will become functional to attend to the problems of passengers on a real time basis. Passengers will be able to call up for complaints while on trains. A mobile application to redress Railway-related complaints is also being developed. We intend to start this facility on a pilot project basis on Northern Railway from 1st March 2015. Based on the experienced gained and the feedback received from passengers, this will be extended to all Railways soon thereafter. Further, keeping in mind the criticality of security related issues, we have dedicated a toll-free number 182 for receiving security related complaints. Railways would utilise resources from the Nirbhaya Fund for augmenting security of our women passengers.

Ticketing
22.Today one of the biggest problems faced by the common man intending to travel in unreserved class is purchasing a ticket. We are introducing ‘Operation Five Minutes’ to ensure that a passenger travelling unreserved can purchase a ticket within five minutes. Provision of modified ‘hotbuttons’, coin vending machines and ‘single destination teller’ windows will drastically reduce the transaction time. For the differently-abled travellers, a special initiative is being launched whereby they can purchase concessional etickets after one-time registration. It is also proposed to work towards developing a multi-lingual e-ticketing portal. We will move towards crediting all refunds through the banking system.

23.In Central Railway, Western Railway and Southern Railway suburban sections, we have already started a pilot project of issuing unreserved tickets on smart phones. We hope to extend this facility progressively to all stations. Automatic ticket vending machines with smart cards and currency options have also been installed at many stations. It is proposed to proliferate this further and also to introduce debit card operated machines. Introduction of integrated ticketing system on the lines of rail-cum-road tickets on Jammu – Srinagar route will be expanded.

24.For the benefit of all our brave soldiers, a Defence Travel System has been developed for elimination of Warrants to make travel easier. This facility has been commissioned in 600 locations out of about 2,000 locations. This facility will be further expanded.

Catering
25.To provide freedom to our valued passengers to select their meals from an array of choices including local cuisine, ecatering has been introduced in 108 trains on an experimental basis from January this year. Food can be ordered through the IRCTC website at the time of booking of tickets. We are working to integrate the best food chains in our country into this project. Depending on the response from our customers, the facility will be extended to cover more trains. It is also intended to set up Base Kitchens in specified Divisions to be run by highly credible agencies for serving quality food.

26.At the moment water vending machines are sparse. We will expand this to cover most Railway stations. This will ensure availability of clean drinking water at very low cost to the people apart from being an environment friendly measure.

Leveraging technology
27.Hand-held terminals will now be provided to Travelling Ticket Examiners (TTEs), which can be used for verification of passengers and downloading charts. This system will help us to move towards paperless ticketing and charting and expedite finalization of refund claims apart from saving reams of paper. We are also exploring the idea of extending the facility of SMS on mobiles as a valid proof of travel for PRS tickets as well.

28.We are putting in place an integrated customer portal, which will be a single interface for the customers to access different services. Seamless navigation would be possible across different websites of Railways.

29.A centrally managed Railway Display Network is expected to be introduced in over 2,000 stations over the next two years which will aid in providing information on train arrival/departure, reservations, general and emergency messages and also any other information of interest to citizens.This facility will promote “Digital India Campaign” and also unlock huge advertising revenue potential.

30.We propose to introduce an “SMS Alert” service to inform passengers in advance the updated arrival/departure time of trains at starting or destination stations. Similarly SMS alert would be sent 15/30 minutes in advance of arrival of the train at the destination.

Surveillance
31.For the safety of our women passengers, surveillance cameras will be provided on a pilot basis in selected mainline coaches and ladies’ compartments of suburban coaches without compromising on privacy.

Entertainment
32.I am happy to announce that our Delhi Division is taking up a project for introducing on-board entertainment on select Shatabdi trains on license fee basis. Depending on the response, the facility will be extended on all Shatabdi trains.

33.Mobile phone charging facilities would be provided in general class coaches and the number of charging facilities would be increased in sleeper class coaches. Station facilities

34.So far, 1052 stations have been identified for upgradation of Passenger Amenities at Station under Adarsh station scheme. It is proposed to include 200 more stations under this scheme.

35.Wi-Fi at all A1 and A category stations is being provided. Further, as part of Digital India initiative, Wi – Fi will be provided at B category stations as well. \

36.Online booking of retiring rooms has already been initiated. The facility of self-operated lockers would also gradually be made available at stations. It is proposed to provide concierge services through the IRCTC at major stations for the assistance of passengers for their pick up and drop. We will also provide a facility for online booking of wheel chair on payment basis for senior citizens, patients and the differently-abled passengers through IRCTC on select stations.

Train capacity enhancement
37.More berths will be made available through increase in number of coaches to meet the growing demand for confirmed seats on the trains. We will achieve this through efficient utilization of assets. Trains, which are fully patronised throughout the year, will be augmented with additional coaches from trains which have relatively lower occupancy levels. Further, capacity in identified trains will be augmented to run with 26 coaches from the existing 24 coaches. More General class coaches will be added in identified trains to benefit the common man.

38.It is also proposed to introduce air-conditioned EMU service on the Mumbai suburban sections after comprehensive assessments of ongoing trials.

Comfortable travel
39.We will replace the present ladders used for climbing upper berths, which are uncomfortable with user friendly ones. We have approached the National Institute of Design for this purpose. As a short-term measure however, we propose to increase the quota of lower berths for senior citizens. TTEs would also be instructed to help senior citizens, pregnant women and differently-abled persons in obtaining lower berths. Folding ladder would be made available in coaches for easy climbing. The middle bay of coaches will be reserved for women and senior citizens for reasons of safety.

40.For better customer experience we would focus on superior coach design and interiors. IR is collaborating with NID to develop ergonomically designed seats. We also intend to progressively replace all coaches with LHB design coaches.

41.With a view to providing superior riding experience and about 20% savings in journey time, it is proposed to introduce a very modern train system called train sets. These are similar to bullet trains in design and can run on existing tracks without an engine to haul them. For the Railways it would imply higher capacity, greater energy savings and increased throughput. We hope that the first set of these trains would be running on our system within the next two years. Based on the experience, train sets will be considered for manufacture in India. It is our endeavor to expand jobs for Indians at every level.

42.Lifts and escalators have been planned at major stations to facilitate easy movement of the elderly and differently abled passengers. An amount of Rs. 120 crore has been provided for this purpose which is about 76% more than the final allotment in the current year. All newly manufactured coaches will henceforth be Braille enabled and Rail Coach Factory has been asked to explore the possibility of building wider entrances for the ease of differently-abled passengers.

43.IR has been trying to provide better passenger amenities at all stations. I am happy to inform the House that this year we have increased the funds allotment for passenger amenities by 67%. I request all corporates, NGOs, charitable institutions and religious institutions to come forward and invest generously for passenger amenities from their CSR fund. I also request all MPs to use part of their MPLAD funds in improving facilities at Railway stations. It is with gratitude that I mention the names of Shri P C Mohan, MP from Bengaluru Central and Shri Gopal Shetty from North Mumbai who have donated Rs. 1 crore and Rs. 1.5 crore respectively from their MPLAD funds for passenger amenities.

44.Madam Speaker, our Hon’ble Members of Parliament represent a vast number of people and could serve as an important link between Railways and the people. Local representatives are in the best position to offer solutions to satisfy the local aspirations. We propose to create Divisional Committees in each Railway to be chaired by Members of Parliament, which will serve as an important link between

Railways and the people of India.
B. Station Redevelopment

45.IR caters to all sections of society, especially the poor. Our Prime Minister has very rightly said that our Railway stations should be best of the breed. Indian Railways has been attempting redevelopment of stations, but the effort has not met with much success. Such an idea needs the power of imagination, combined with a stable business sense. A transformed station can change the skyline of small and medium cities and bring in revenues, and become an incubator of local economy.

46.While the process for development of the already selected stations would continue, for the rest of the stations, we propose to revamp the station redevelopment policy completely and simplify processes for faster redevelopment by inviting open bids from interested parties. The present stations will be available for development on “as is where is” basis, to exploit the space and air rights on concession basis. Land will not be sold.
Anyone can participate in this bidding with their designs and business ideas by providing the operational requirements of Railways for running trains at these stations. All approved bids will be processed by independent experts and uploaded on the web and integrated with best bidding practices. For quick decision making, the Zonal and Divisional offices will be empowered. A monitoring cell will be constituted to ensure adherence to timelines. We want our Railway stations to be iconic structures with architecture reflecting the culture and character of the city. We invite the state governments and the local bodies to be our partners in this endeavour.

47.Most of the Railway terminals located in big cities are amidst very congested areas. We propose to develop Satellite Railway terminals in major cities with the twin purpose of decongesting the city as well as providing service to passengers residing in suburbs. The satellite terminals will have modern facilities for originating and terminating trains, which will also briefly stop at the existing major terminals. Ten select stations will be taken up in 2015-16 for this purpose.

C. Capacity Augmentation

Network expansion
48.The key objective of our action plan of transforming the Railways is to significantly expand our network capacity. Our high-density networks are congested, over-strained and capacity-constrained. Our customers are dissatisfied. Our key customers like the coal, steel, and cement industries need new lines to transport their wares. Decongesting these networks with a basket of traffic generating projects is a priority.

49.There are inherent advantages in creating more capacity on the existing network. It requires shorter completion time. Since most of the land is already available it is less expensive. And it generates incremental revenues quickly.
These revenues can then be used to invest in other lines. Additional benefits include higher average speeds for trains, timetabling of freight trains, improved punctuality
of passenger trains and increase in carrying capacity.

50.While last mile connectivity projects continue to be accorded the highest priority, we intend to fast track the sanctioned works on 7,000 kms of double/third/fourth lines and commission 1200 km in 2015-16 at an investment of Rs. 8686 crore. This budgetary allotment under Capital is 84% higher than 2014-15. We also intend commissioning 800 km of gauge conversion. Additionally, we have sanctioned 77 projects covering 9,400 km of doubling/tripling/quadrupling works along with their electrification at a total cost of Rs. 96,182 crore which is over 2700% higher in terms of amount sanctioned in 201314, 2014-15 being a Plan holiday. The priority for undertaking projects has been determined by a designated committee for capacity enhancement, revenue generation and decongestion. Negotiations are on with financial institutions for funding of these projects through extrabudgetary resources. Hon’ble Members would be happy to note that these projects cover almost all States.

51.Traffic facility works like construction of longer loops, creating smaller block sections, building by-pass lines, making crossing stations, augmenting terminals and removing permanent speed restrictions is our utmost priority. These are small expenditure works but they provide huge operating benefits in a short time to de-bottleneck and create additional capacity. In the year 2015-16 works with outlay of Rs. 2374 crore will be taken up.

52.Madam Speaker, Indian Railways is committed to provide rail connectivity to all the North-Eastern states. I am happy to announce that Meghalaya has been brought on the
Railway map of India and direct connectivity to Delhi has been provided to Arunachal Pradesh. Further, the Barak Valley will be brought on broad gauge by March this year. The work for connecting the remaining states of this region is progressing well.

53.Indian Railways is committed for faster rail network growth in Jammu & Kashmir. The rail connectivity between Jammu region and the Kashmir valley through the Banihal tunnel provides all-weather connectivity with the rest of the country. The commissioning of UdhampurKatra was like a dream come true for millions of pilgrims.

54.The implementation of two dedicated freight corridor projects on Eastern and Western routes is gathering pace. We will target to award 750 km of civil contracts and 1300 km of system contracts in 2015-16. Durgawati-Sasaram, a 55 km section of Eastern DFC is proposed to be completed in the current year. Preliminary Engineering cum Traffic Survey (PETS) for four other DFCs is in progress and will be completed this year. We intend to explore the idea of construction of DFC feeder routes through private participation.

55.In order to achieve fuel economy and also to enhance traffic output, it is necessary to accelerate the pace of Railway electrification. As against a sanction of 462 route kms in 2014-15, a length of 6,608 route kilometers has been sanctioned for 2015-16. This constitutes an increase of 1330% over the previous year.

Expansion of freight handling capacity
56.Indian Railways must expand freight handling capacity in tandem with the expansion of freight carrying network capacity. We propose to set up a PSU – Transport Logistics Corporation of India (TRANSLOC), to develop common user facilities with handling and value-added services to provide end-to-end logistics solution at select Railway terminals through Public Private Partnerships. In the initial period, it has been proposed to upgrade 10 existing goods sheds of Indian Railways and develop 30 small multimodal logistic parks where Indian Railways has surplus land.

57.For the benefit of our farmers, a state of the art Perishable Cargo Centre is under completion at the Azadpur Mandi with a scientific banana-ripening Centre. We have taken steps to develop the air cargo sector to facilitate and integrate the movement of air cargo between ICDs and the gateway airports.

58.To facilitate the rapid development of a network of Private Freight Terminals (PFT), a policy was issued in 2010 and revised in 2012 to invite private investment in this space. Certain issues have emerged which are discouraging further investments in PFTs. We intend to address these urgently so that the proliferation of these terminals is not hampered. We will, in the next three months, review the Wagon Leasing Scheme, Special Freight Train Operator Scheme, Private Freight Terminal Scheme and Liberalised Wagon Investment Scheme for making them more liberal, broad-based and attractive to our partners from the private sector. We will also consider new and lighter design of wagons for better fuel efficiency and carrying capacity.Railways will also work out modalities to facilitate provision of spare Railway land and redundant goods sheds on nominal licence fee to private developers for development of such facilities.

59.In an effort to reduce empty flows of wagons, an Automatic Freight Rebate Scheme for traffic loaded in Traditional Empty Flow Direction has been launched in October 2014 as a pilot project on NF Railway and Southern Railway. We propose to launch the scheme on an all-India basis.

60.Long haul freight operations, where two or more freight trains are combined into a single train formation, will be used extensively. Towards this end, the construction of long loop lines will be expedited. Further, the pace at which distributed power systems are to be provided on locomotives deployed on long haul trains will be speeded up.

Improving train speed
61.The speed of 9 railway corridors will be increased from the existing 110 and 130 kmph to 160 and 200 kmph respectively so that inter-metro journeys like DelhiKolkotta and Delhi-Mumbai can be completed overnight. This will involve the upgradation of track including turnouts and rolling stock to higher standards as well as the adoption of improved methods of track recording, monitoring and maintenance.The average speed of freight trains, both in empty and loaded conditions, will be enhanced. A policy of attaining speeds of 100 kmph for empty freight trains and 75 kmph for loaded trains is being put in place. In pursuit of the objective, to maximize loading in every train, the loading density on all major freight bearing routes of Indian Railways will be upgraded to 22.82 tonne axle loads.

Bullet train
62.Madam, we will continue to pursue with vigour our special projects like High Speed Rail between Mumbai-Ahmadabad. The feasibility study for this is in advanced stage and report is expected by the mid of this year. Quick and appropriate action will be taken once the report is available with us. Regarding the other high speed routes on the diamond quadrilateral, studies are being commissioned.
Upgrading manufacturing capability

63.The transformation of Railways offers huge opportunities for Make in India initiative. With increasing capacity, Indian Railways would require more locos, more wagons and more coaches. The ‘Big ticket’ manufacturing ideas include High Horse Power and green technology locomotives, commodity specific wagons like auto carriers, signaling systems and train protection systems and track laying and track maintenance machines. All this will result in creation of job opportunities.

64.Functioning of Indian Railways Production Units and Workshops would be reviewed with a view to providing them a cutting edge in the manufacture of their products. Measures for technological upgradation and enhancing productivity would be undertaken to make them selfsustaining. Spare capacity in these units can be used for external customers. We propose to get a study conducted to examine these issues.

D. Safety:
65.Safety is of paramount importance. The loss of even a single life is too high a price to pay. I offer my deepest condolences to the families of all accident victims and Railway personnel who have sacrificed their lives in the line of duty. Indian Railways have safety concerns on account of unmanned level crossings, manned level crossings, derailments, collisions, and fire. An action plan is being prepared for each of these areas.

66.We are preparing a five-year corporate safety plan by June 2015 indicating annual quantifiable targets. We will examine all pending recommendations made by High Level Safety Review Committee headed by Dr. Kakodkar Committee by April 2015.

67.Our ultimate objective is to eliminate all unmanned level crossings by construction of Road over Bridges (ROBs) and Road under Bridges (RUBs). In the short term, RDSO has
been asked to develop a suitable device with reliable power supply system based on theft-proof panels/batteries in consultation with Indian Space Research Organization, using geo-spatial technology for providing audio-visual warning to road users at unmanned level crossings. Further, a radio based signal design project has been taken up with IIT Kanpur for warnings at unmanned level crossing.

68.Keeping in view the critical need to facilitate the construction of ROB/RUB’s, a web based application has been commissioned with user-friendly measures for online submission and approval of drawings within 60 days and an MOU has also been signed with the Ministry of Road Transport and Highways in this regard. I am happy to announce that in the next financial year 970 number of ROB/RUBs and other safety-related works to eliminate 3438 level crossings at a total Railway expense of Rs. 6,581 crore have been sanctioned. This is more than 2600% higher than the sanctioned number of ROBs/RUBs during the current year and the highest ever in recent times. These projects cover almost all States of our Union.

69.To prevent fire in coaches and also prevent coaches from climbing over each other during accidents, RDSO has been asked to develop new systems. We also propose to install Train Protection Warning System and Train Collision Avoidance System on select routes at the earliest.

70.To curb derailments, modern track structure consisting of sleepers and heavier rails are being used while carrying out primary track renewals. Better welding techniques would also be promoted. Further, analogue machines for testing of rails are being replaced with digital type machines, which are more reliable.

E. Technology upgradation

71.Every dynamic and thriving organization needs to innovate and re-invent its practices. In accordance with the vision of Hon’ble Prime Minister for Innovation, Technology  development and Manufacturing, we intend to set up an innovation council called “Kayakalp” for the purpose of business re-engineering and introducing a spirit of innovation in Railways.

72.We need to invest in fundamental and applied research for seeking solutions to rail-specific issues. We intend to set up a technology portal to invite innovative technological solutions.

73.We have decided to strengthen the RDSO into an organization of excellence for applied research. RDSO would collaborate with institutions of repute. We will set up in 2015-16 four Railway Research Centers in select universities for doing fundamental research. GOI has conferred Bharat Ratna on Pandit Madan Mohan Malaviya.To mark the centenary celebrations of Banaras Hindu University, we propose to set up ‘Malaviya Chair’ for Railway Technology at IIT (BHU), Varanasi. This Chair will help in development of new materials to be used in all assets of Railways.

74.A consortium of Ministry of Railways, Ministry of Human Resource Development, Ministry of Science And Technology and Industries on an Investment Sharing Model is being set up as part of Technology Mission for Indian Railways to take up identified Railway projects for research.

75.We will shortly unveil an IT vision for the Railways. Online information on latest berth availability on running trains, an integrated mobile application including station navigation system, etc. will be made available. Customer friendly freight movement initiatives such as introduction of bar coded/RFID tracking of parcels and freight wagons, automated parcel warehouses, customer relationship management system, etc., will be undertaken. There will be an integration of train control and asset management applications.

76.IR proposes to move from preventive to predictive maintenance. It is proposed to explore the possibility of completely mechanized integrated track maintenance, which could bring in more efficiency. We intend to bring in state of the art equipment for even routine examination of tracks.

F. Partnerships for development

77.We will revamp the existing PPP cell in the Ministry to make it more result oriented. PPP will help in creating more jobs in the economy besides augmenting capital for improving Railways.

78.Railways have launched new Model Concession Agreements recently for many of the participative models, and guidelines for this have been issued. Projects for rail connectivity to many ports and mines are being developed under participative models. Standardisation of contractual framework that ensures a level playing field, simplification of procedures and consistency of policy will be ensured.

79.Technology intensive and complex projects like speed raising and station redevelopment require lot of handholding by a specialized agency in terms of preparatory work, exploring technology options and managing bid processes. Indian Railways have signed in the past MOUs for technical cooperation with number of foreign railways or their entities. We propose to launch “Foreign Rail Technology Cooperation scheme”, in order to achieve the higher quality service for our nation.

80.The suburban rail networks are the lifeline for metro cities of Mumbai, Kolkata and Chennai. To meet growing demand there is an urgent need for integrated transport solutions. We will work with all states towards this end. We propose to take up MUTP III for Mumbai.

81.Expansion of railway network to remote and backward areas serves as an engine for growth and brings overall socio-economic development in the region. We propose to set up joint ventures with States for focused project development, resource mobilization, land acquisition, project implementation and monitoring of critical rail projects. I am happy to share that most of them have conveyed their acceptance to our proposal.

82.Railways have a big shelf of projects, which require to be executed at a fast pace. The expertise of Railways PSUs will be used by leveraging their balance sheets to expedite the completion of identified projects within specified time lines and to undertake a higher volume of activities.

83.It is also proposed to set up JVs with our major public sector companies who are our customers for meeting their requirements of new lines. Such focused execution of works will ensure faster completion and ultimately provide the much needed path for them to transport their produce and at the same time generate revenues for Railways.

G. Improvements to Management Processes and Systems

84.Madam Speaker, for the delivery of the action plan, Indian Railways will require new governance structures, new delivery mechanisms, extensive management reforms and transparency across the board. For quick decision-making I have already delegated the power in respect of stores and works tenders to General Managers. I intend to further delegate, de-centralise and de-regulate.
Rules and regulations governing freight business will be simplified and made more customer friendly. For example, we have abolished the system of obtaining Rail Transport Clearance from the Ministry. We also intend simplifying the entire process of construction of private sidings.

85.Delegation and empowerment should be accompanied with accountability and responsibility and also monitoring from the apex to ensure that the organisation’s objectives are being met. Towards this end, we propose to get a systems audit conducted for review of all processes and procedures being followed in

Zonal Railways.
86.An exercise in identification of global benchmarks for key operating and maintenance activities is being carried out.

87.We intend to improve upon the existing appraisal mechanism for the selection of projects and introduce simulation tools for project planning and decision-making.Further, it is proposed to introduce the EPC system of contracting all over Indian Railways with a view to timely completion of projects.

88.Madam Speaker, we have limited resources and thus must ensure that all public expenditure results in an optimal outcome. We, therefore, intend to set up a working group to modify the present system of accounting, to ensure tracking of expenditure to desired outcomes. The data on costing would be available online including costs incurred on constructing, augmenting, maintaining and operating railway lines. This would also help in undertaking post commissioning evaluation studies.

89.We also propose to have the train operations audited with a view to increasing productivity and bringing in transparency.

90.We are also proposing to expand paperless working in our material management system. In line with focus on ease of doing business, we will digitally integrate our vendors through Vendor Interface Management System to provide single window interface to vendors.

H. Resource Mobilisation

91.Madam Speaker, IR today is resource-light. This is unsustainable. Let alone capital investment, there is not even enough for depreciation. Conventionally, we have looked for Gross Budgetary Support from the Union Government. But this is business as usual. This is neither viable nor necessary.

92.First, the Union government’s financial resources are themselves over-stretched. Second, internal generation of resources will pick up once the Railway reforms start, GDP growth occurs and the Railways begin to attract traffic that has moved elsewhere, especially to the road transport sector. Third, for remunerative projects, it should be possible to generate resources through market borrowings, routed through partnerships with Railway PSUs and IRFC. Fourth, there are several areas where resources can be generated through PPP. Fifth, moving away from debt, some projects can be equity-driven, through partnerships with State governments.

All these lead to a simple proposition. One can leverage the resources one possesses better.

93.The size of the Plan Budget has gone up by 52% from Rs. 65,798 crore in 2014-15 to Rs. 1,00,011 crore in 2015-16. Support from the Central Government constitutes 41.6% of the total Plan Budget and Internal generation 17.8 %. In view of the fact that it would be a challenging task to initiate the mobilization of extra-budgetary resources, it is proposed to set up a Financing Cell in the Railway Board, which would seek the benefit of advice from experts in this field.

94.For financing remunerative projects through market borrowings, it is intended to tap low cost long term funds from insurance and pension funds, multi-lateral and bilateral agencies which can be serviced through incremental revenues. Railways will create new vehicles to crowd in investment from long-term institutional investors and other partners. These may include setting up an infrastructure fund, a holding company and a JV with an existing NBFC of a PSU with IRFC, for raising long term debt from domestic as well as overseas sources, including multilateral and bilateral financial institutions that have expressed keen interest in working closely with Railways in this endeavor. We will monetize our assets rather than sell them.

95.I wish to state that encroachment on Railway land is a serious issue. To counter this, digitized mapping of land records has been initiated and responsibility will be fixed on officials for any encroachments.

96.Madam Speaker, we are drawing up a comprehensive policy to tap the latent advertising potential. The new strategy would harness all avenues including offering stations and trains for corporate branding.

97.We are launching a Coastal Connectivity Program this year where Railways in partnership with the concerned ports will deliver rail connectivity to Nargol, Chharra, Dighi, Rewas and Tuna. This programme is expected to mobilize investments of approximately Rs. 2000 crore.

98.We propose to launch projects worth Rs. 2500 crore through BOT/ Annuity route. These include Wardha- Nagpur 3rd line, Kazipet-Vijaywada 3rd line, Bhadrak -Nargundi 3rd line and Bhuj- Nalia Gauge Conversion.

99.Scrap disposal policy of the Indian Railways will be reviewed for speedier scrap disposal.

I. Human Resources

100.I strongly believe that the workforce of Indian Railways is its strength. To prepare them for the future and for enhancing organizational performance, systematic Human Resource Audit would be undertaken. As part of the focused Human Resource strategy, measures would be adopted to raise employee productivity in line with global standards. It is also proposed to pursue creation a separate accounting head for HRD and develop ERP based Human Resource Management System.

101.Our frontline staff is the first point of contact with the public. We intend to start a special training module on soft skills for them so that our customers feel welcomed. Training in yoga will be imparted to our staff, especially from RPF.

102. We are in the process of setting up a full-fledged University during 2015-16.

103. We will take up the work of repair of staff quarters and also of RPF barracks. We will also improve the delivery of health services to our employees. For the recreational pursuit of our staff we have decided to upgrade four Holiday Homes, to begin with.

J. Energy and sustainability

104. Madam Speaker, we have set up an Environment Directorate in Railway Board to give increased focus and thrust on environment management.

105. Indian Railways is the largest consumer of electricity and thus has substantial potential for reducing energy consumption through various energy conservation measures. Thrust will also be given for adoption of energy efficient LED luminaries, appliances, etc. as a part of an energy conservation drive. A detailed energy audit will reveal huge potential for energy saving.

106. Although a bulk consumer, Railways pays extremely high charges for traction power. It is proposed to procure power through the bidding process at economical tariff from generating companies, power exchanges, and bilateral arrangements. This initiative is likely to result in substantial savings of at least Rs. 3,000 crore in next few years.

107. To reduce dependence on fossil fuels, it is intended to expand sourcing of Solar Power as part of the Solar Mission of Railways. Work is in full swing at the solar power plant at Katra station and is slated for completion in March 2015. Further, 1000 MW solar plants will be set up by the developers on Railway/private land and on rooftop of Railway buildings at their own cost with subsidy/viability gap funding support of Ministry of NonRenewable Energy in next five years.

108. We have launched a mission for water conservation. Water recycling plants will be set up at major water consumption centres after conducting water audit.

Expansion of water harvesting systems will also continue.
109.All our workshops are in the process of getting accredited for environment management. This will be extended to the loco-sheds, and major coaching and wagon maintenance depots.

110. Madam Speaker, the House will be happy to note that CNG based DEMUs have been introduced on Northern Railway and it is proposed to convert 100 DEMUs to dual fuel – CNG and diesel. Locomotives running on LNG are also currently under development.

111. We are making efforts to bring noise levels of locos at par with international norms. We will demonstrate our sensitivity to the wildlife by factoring in concerns related to their environment.

112. Madam Speaker, we need to invest in Indian Railways also because it is necessary for our ecological sustenance. The annual consumption of fuel by the Railways is just about 7% of the annual fuel consumption by the road sector. The energy consumption is about 75%90% less for freight traffic when compared to road. The carbon dioxide emission is about 80% less than road. Investment in Indian Railways is an investment in our future. It is an investment in our sustainability. It is an investment for posterity.

K. Transparency and Governance initiatives

113. As the Hon’ble Members of the House are aware, Indian Railways recruits various categories of employees through its 21 recruitment boards. As a major transparency initiative, the system of on-line applications has been introduced for two categories as a pilot project. It is proposed to extend this further to include all future recruitments.

114. Corruption at all levels continues to affect the common man. We will explore all possible solutions to address this menace.

115. In order to provide a thrust to transparency, e-procurement value chain is being expanded to cover all

Divisions, Depots and Workshops.
116.Indian Railways currently is the only rail-based trans-city infrastructure provider and operator in the country. Therefore, for the purpose of orderly development of infrastructure services, enabling competition and protection of customer interests, it is important to have a regulation mechanism independent of the service provider. Initially it was contemplated to set up only a Tariff Regulator, however, it is now proposed to set up a mechanism, which will be regulations, setting entrusted performance with making standards and determining tariffs. It will also adjudicate on disputes among licensees/private partners and the Ministry, subject to review in appeal.

Social initiatives
117. Even as we pursue this transformation agenda, Indian Railways will continue to honour its wider obligations to the nation. With this in mind and in keeping with our Government’s high priority on skill development, Indian Railways, with its vast spread, will contribute by making available its infrastructure like stations and training centres for skill development. Indian Railways has a huge talent of skilled personnel and their services are also available for this national cause.

118. To encourage self-employment, we will promote products made by Self Help Groups, consisting mainly of women and youth. Konkan Railway (KR) has already launched this programme in three states during the past three months. KR expects to generate employment for approximately 50,000 persons from this scheme in the next few years.

Tourism
119. Tourism holds a great potential for job creation and economic development of a region. Indian Railways will join this effort Incredible Rail for Incredible India. We have successfully experimented on Konkan Railway tourism promotion through training of auto-rickshaw and taxi operators as tourist-guides since they are the first point of contact for our passengers. We intend replicating this at major tourist stations.

120. We propose to explore the possibility of offering some coaches in select trains connecting major tourist destinations to travel agencies on a revenue sharing model.

121. Madam Speaker, I have the honour to recall that this year we are celebrating 100 years of the return of Mahatma Gandhi from South Africa to India. IRCTC will work on promoting the Gandhi circuit to attract tourists to mark this occasion. To help farmers to learn about new farming and marketing techniques, IRCTC will work

Expectations from Rail Budget 2015 for Odisha

February 26, 2015 Leave a comment

Stories related to Rail Budget 2015 (for Odisha)

Naveen seeks Rs 3,160 cr for Odisha in Rail Budget – BS

(With gross earnings of the Railways from Odisha projected to be in excess of Rs 14,000 crore for 2013-14, the state government has sought allocation of Rs 3160 crore in the ensuing Railway Budget.)

Expectations of Railway Budget in Odisha – Indian Express

(With atleast six railwayline projects dragging on for more than a decade, the Odisha government has pinned its hope on ehnanced allocation in the railway budget for 2015-16 to be presented on Thursday.)

 

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