INDIAN BUDGET – IMPLICATION FOR TRANSPORT SECTOR

By Izra Nawas

Government of India has unveiled its annual budget for year 2017-18 with big fanfare. The government has allocated INR 2413.87 billion (US$ 37 billion) in 2017-18 for transportation sector as a whole, including rail, roads, shipping. It is expected that the magnitude of investment will spur a huge amount of economic activity across the country and create more job opportunities.

1.       KEY HIGHLIGHTS

The major highlights of the budget are:

RAILWAYS

a)  Indian Railways will focus on key 4 areas – Passenger Safety, Capital and development works, Cleanliness, and Financing and accounting reforms

b)  To improve safety, RRSK Fund (Rashtriya Rail Sanraksha Kosh) will be created with a corpus of INR 1000 billion (US$ 15 billion) over a period of 5 years. The fund will be used to eliminate unmanned level crossings on Broad Gauge lines by 2020

c)  The government has proposed a total capital and development expenditure of Railways at INR 1310 billion (US$ 20 billion) in 2017-18, out of which INR 550 billion (US$ 8.5 billion) by the Government. The remaining amount will be raised from external resources

d)  Indian Railways will commission 3,500 km of new lines in 2017-18. Further, the government will carry out modernisation and upgradation of identified corridors. In the next 3 years, the throughput is proposed to be enhanced by 10%

e)  Railways will award at least 25 stations for station redevelopment during 2017-18

f)   It is proposed to fit all coaches of Indian Railways with bio toilets by 2019. Further, Indian Railways will set up 5 solid waste management plants for environment friendly disposal of solid waste and conversion of biodegradable waste to energy

g)  ‘Coach Mitra’, a single window interface, to register all coach related complaints and requirements to be launched

h)  Tariffs of Railways would be fixed, taking into consideration costs, quality of service and competition from other forms of transport

METRO RAIL

Metro rail is emerging as an important mode of urban transportation. The government has recognized the key role of private investment and expertise in the development of metro projects in India. Two key measures are:

a)  A new Metro Rail Policy will be prepared with focus on innovative models of implementation and financing, as well as standardisation and indigenisation of hardware and software

b)  A new Metro Rail Act will be enacted by rationalising the existing laws. This will facilitate greater private participation and investment in construction and operation

ROAD SECTOR

a) The allocation for highways has been increased to INR 649 billion (US$ 9.8 billion) in 2017-18

b)  For better connectivity with ports and remote villages, the ministry has identified 2,000 kms of coastal connectivity roads for construction and development

 

2. BUDGETARY ALLOCATION

The budget allocation of funds under different key project is as follows:

 

Sectors

Amount (INR billion)

Road Sector

Roads and Bridges

405.92

National Highway Authority of India

238.92

Research Training and Studies and Other Road Safety Schemes

2.50

Rail Sector

Grants to Delhi Metro Rail Corporation

1.50

Metro Projects

178.10

Indian Railways

550.00

Urban Rejuvenation Mission

AMRUT - Atal Mission for Rejuvenation and Urban Transformation & Smart Cities Mission

90.00

Electric Vehicles and Testing Facility

Scheme for Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle in India - (FAME - India)

1.75

National Automotive Testing and Research and Development Infrastructure Project (NATRIP)

4..85

Capacity Building

Transport Planning and Capacity Building in Urban Transport

0.40

Water Transport

 

Grants to Inland Water Transport Authority of India

3.03

 

3. MISSING AREAS

The following are key missing areas in the budget:

a)      No fund provision for “Green Urban Transport Scheme” to finance buses for public transport

b)      Small increase in fund allocation for FAME Scheme (expected more than INR 10 billion allocation)