No laundry list of new trains to be started. No announcement of new lines to be laid with ambitious targets. No pet projects to be set up in core constituencies of the ruling party. Make no mistake, Railway Minister Suresh Prabhu’s maiden budget is not a typical politician’s budget; it shows the deft touches of a professional who knows what it takes to turn around a leviathan’s fortunes that have been on a downhill ride in the last few years. Whether it is the focus on existing high-density corridors where increasing capacity is cheaper and quicker or the new talk of improving “customer experience” or for that matter, the realisation that Railway finances have to be made self-sustainable, Mr. Prabhu has ticked all the right checkboxes. The budget speech reads more like a vision statement than a report on the Railways’ financial and operational performance. The only connection with past budgets is the decision to not increase passenger fares but tinker with freight rates. Mr. Prabhu’s challenge, though, will be in implementing his ambitious agenda, specifically in finding resources, financial and technical, to achieve targets. For example, the Rs.8.56 lakh crore investment plan for the next five years sounds impressive no doubt, but how is the Railways going to fund such a mammoth sum? With operating expenses consuming nine out of every 10 rupees earned by the Railways, there just isn’t enough surplus to plough back into investment.

This is where the Railways needs to think out-of-the-box. Mr. Prabhu has acknowledged the problem and has listed out several options to raise finances, including borrowing from multilateral institutions such as the World Bank and pension funds whose investment horizon would match the long-term plans of the Railways. Clearly, Mr. Prabhu will have to draw heavily on his finance background and expertise to make these work. The Railway Minister’s ambitious agenda comes through in his plans for the coming fiscal too. For instance, electrification of 6,608 route kilometres in 2015-16 compared to 462 km sanctioned in 2014-15, or for that matter, the plan to spend Rs.96,182 crore in doubling/tripling/quadrupling and electrifying 9,400 km of tracks, sound impressive – but execution will be the key. We have seen such ambitious plans in the past falter at the execution stage. The projected improvement in operating ratio, a measure of efficiency, from 91.8 per cent this year to 88.5 per cent in the coming one sounds impressive, but the fine print on expenditure needs to be watched because this ratio is easy to massage. Overall, Mr. Prabhu’s budget is a break from the past in taking a long-term view of the Railways’ future by making it financially independent and operationally efficient. He has five years to reach this destination.