Indian Economy, 5th edition (139 page)
Read Indian Economy, 5th edition Online
Authors: Ramesh Singh
In the last few years public expenditure on
social programmes
increased dramatically. In the Eleventh Plan period nearly Rs. 7 lakh crore has been spent on the 15 major flagship programmes. A number of legislative steps have also been taken to secure the rights of people, like –
i.
the Right to Information Act, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA);
ii.
the Forest Rights Act; and
iii.
the Right to Education (RTE).
However, there are also pressing governance issues like programme leakages and funds not reaching the targeted beneficiaries that need to be addressed. Direct benefit transfer (DBT) with the help of the Unique Identification (UID) number can help plug some of these leakages.
Sustainable Development and Climate Change
Though multilateral efforts on sustainable development and climate change have led to several positive outcomes, there are still
areas of concern
where further work is needed to safeguard the interests of developing countries. The key question to be addressed is equity in the evolving arrangements. It has to be ensured that domestic goals continue to be nationally determined even as we contribute to the global efforts according to the principle of
CBDR
(Common but Differentiated Responsibilities). More importantly, equity, fair burden sharing, and equitable access to global atmospheric resources have to be protected and addressed more adequately.
With the
Twelfth Plan’s focus
on
‘environmental sustainability’
, India is on the right track. However, the challenge for India is to make the key drivers and enablers of growth like infrastructure, the transportation sector, housing, or sustainable agriculture to grow sustainably. This leads us to the most vital issue: of raising additional resources for meeting the need for economic growth with greater environmental sustainability. More often, it is the resource crunch which is the stumbling block for developing countries like India. While it makes efforts to efficiently and expeditiously bring price signals and other policy instruments into play, India could do much more if new and additional finance and technology were made available through the multilateral processes. There is a case for greater cooperation, action, and innovation, provision of finance and technology for developing countries, and institutions and mechanisms for capacity building.
*
As per a Ministry of Finance release dated 29th March 2013, the CAD of India has reached to the level of 6.7 per cent by the 3rd Quarter (October-December) of the fiscal 2012-13 which is the highest ever level in India’s history.
1
Prepared by Mr. Rohit Lamba and Dr. Prachi Mishra. We would like to thank Amresh Acharya at the World Gold Council, Suresh Phadnis at PMEAC, Sneha Arora and Arun Narendhranath at ISB for many discussions.
2
There are three active gold mines, which meet less than 1 per cent of domestic demand.
3
World Gold Council.
References:
Sehgal, Sanjay Muneesh Kumar, Wasim Ahmad and Priyanshi Gupta, 2012, “The gold rush and policy options: An empirical study”, Department of Financial Studies, University of Delhi.
4
Prepared by Abhijit Banerjee and Gaurav Chiplunkar, cited by the
Economic Survey 2012-13
, p. 14
COMMENTS & REACTIONS
The Railway Budget was “a mixed bag for India Inc”
(The Economic Times)
which lead to various industries cautioning that the hike in freight charges will fuel inflation, while other chambers suggested some proposals which, if implemented could set the growth multiplier in motion.
“The step to increase the freight charges would increase the inflation. I agree with the freight hike on industrial products, but the Railway Minister should withdraw the hike on urea and farm products as this will hit the aam aadmi,”
Assocham
President Rajkumar Dhoot said. The Budget has proposed to raise the freight charges across the board by an average 5.8 per cent. Assocham termed it as a “soft rail budget’ and said that in its efforts to please all sections of the society, the government has missed yet another opportunity for effective corporatisation of Indian Railways to ensure viable commercial operations. “Capacity constraints of Railways remains the primary issue to be addressed more so, in wake of mounting pressure on passenger and freight services, the Budget could have put more focus on this aspect,” Dhoot said.
CII
also said that the move would impact consumers. “It will push the prices and it will have an impact on consumers as they have to bear the huge cost. Inflationary pressure is expected to remain high,” Member, CII Railway Equipment Division Rajeev Jyoti said.
However,
FICCI
Secretary General Didar Singh said that this year’s Rail Budget reflects the difficult economic scenario and contains several proposals which, if implemented, would set a growth multiplier in motion.
AEPC
Chairman A Sakthivel said increase in the freight of diesel will further put strain on the apparel and garment sector. “Our movement of goods meant for exports to the ports is mostly via railways. Increased cost will reduce our profit margin further and impact our demand. Therefore, I request government to exempt the freight hike on the exportable goods immediately,” he added.
Exporter’s body
FIEO
too said that the increase in freight rates would add on to the cost of inputs at a time when there is a general slow-down in the economy.
SUMMARY OF THE BUDGET
Thrust of the Budget
The Budget announces a
‘4-Point’
Thrust areas they are –
1.
Safety
2.
Consolidation
3.
Passenger Amenities
4.
Fiscal Discipline
Some Achievements/Initiatives
•
IR (Indian Railways) enters the one billion tonne
Select Club
joining Chinese, Russian and US Railways;
•
IR also joins
Select Club
running freight trains of more than 10000 tonne load;
•
‘Fuel Adjustment Component’
concept to be implemented linking tariffs with movement of fuel prices;
•
Target of Rs 1000 crore each fixed for
RLDA
(Rail Land Development Authority) and
IRSDC
(IR Station Development Corporation to be raised through PPP in 2013-14;
•
New fund – Debt Service Fund – to be set up to meet committed liabilities of debt servicing for WB and JICA loans for DFC and other future liabilities.
Measures for improving Safety & Security
•
Making a
Corporate Safety Plan
for a ten year period (2014-2024)
•
Elimination of 10,797 level crossings (LCs) during the 12th Plan and no addition of new LCs to the IR system henceforth
•
Introduction of
Train Protection Warning System
on Automatic Signalling Systems
•
Rigorous trials of the indigenously developed
Train Collision Avoidance System
•
Using 60 kg rails, 260 meter long welded rail panels and improved flash butt welding technology
•
Introduction of 160/200 kmph Self Propelled Accident Relief Trains
•
Induction of crash worthy LHB coaches with anti-climb feature
•
Rehabilitation of identified 17 distressed bridges over next one year
•
Provision of comprehensive fire and smoke detection systems
•
Provision of portable fire extinguishers in Guard-cum-Brake Vans, AC Coaches and Pantry Cars in all trains
•
Use of fire retardant furnishing materials in coaches
•
Measures initiated to deal with elephant related accidents
•
Four companies of women RPF personnel set up and another 8 to be set up to strengthen the security of rail passengers, especially women passengers
•
Recruitment to RPF with 10% vacancies reserved for women
Rail Based Industries
Following New factories/workshops to be set up:
•
A new Forged Wheel Factory at Rae Bareli in collaboration with Rashtriya Ispat Nigam Limited
•
A Greenfield Mainline Electrical Multiple Units (MEMU) manufacturing facility at Bhilwara (Rajasthan) in collaboration with State Government and BHEL
•
A Coach Manufacturing Unit in Sonepat District (Haryana) in collaboration with State Government
•
A Midlife Rehabilitation Workshop at Kurnool (Andhra Pradesh) in collaboration with the State Government
•
Bikaner and Pratapgarh workshops to undertake POH of BG wagons
•
A workshop for repair and rehabilitation of motorised bogies at Misrod (Madhya Pradesh)
•
A new wagon maintenance workshop in Kalahandi (Odisha)
•
A modern signaling equipment facility at Chandigarh through
PPP route
Green Initiatives
•
Setting up of Railway Energy Management Company (REMC) to harness potential of
solar
and
wind
energy
•
Setting up of 75 MW capacity windmill plants and energizing 1000 level crossings with
solar power
•
Deployment of new generation energy efficient electric locomotives and EMUs
•
More usage of agro-based and recycled paper and
ban use of plastic
in catering
Passenger/Rail Users’ Amenities
•
Identification of 104 important stations for immediate attention to all aspects related to cleanliness
•
Progressive extension of bio-toilets on trains
•
Provision of concrete aprons on platforms with mechanised cleaning facilities
•
Extension of On Board Housekeeping Scheme and Clean Train Stations to more stations and trains
•
Extension of Unreserved Ticketing System (UTS), Automatic Ticket Vending Machines (ATVMs), Coin-operated Ticket Vending Machines (CO-TVMs) and scheme of Jan-Sadharan Ticket Booking Sevaks (JTBSs)
•
Setting up of six more Rail Neer bottling plants at Vijayawada, Nagpur, Lalitpur, Bilaspur, Jaipur and Ahmedabad
•
Pilot project on select trains to facilitate passengers to contact on board staff through SMS/phone call/e-mail for coach cleanliness and real time feedback
•
8-10 more mechanised laundries for quality washing of linen
•
Provision of announcement facility and electronic display boards in trains
•
Providing free
Wi-Fi
facilities on several trains
•
Upgrading another 60 stations as
Adarsh Stations
in addition to 980 already selected
•
Associate voluntary organisations for providing first aid services at railway stations
•
Introduction of an
‘Anubhuti’
coach in select trains to provide excellent ambience and latest facilities and services
•
179 escalators and 400 lifts at A-1 and other major stations to be installed facilitating elderly and differently abled
•
Affixing Braille stickers with layout of coaches including toilets, provision of wheel chairs and battery operated vehicles at more stations and making coaches wheel-chair friendly
•
Some JTBS to be reserved for disabled people
•
Curbing malpractices in reserved tickets including tatkal scheme
•
Third party audit and tie up with food testing laboratories for food quality control; ISO certified state-of-the-art base kitchens to be set up in railway premises
•
Centralized Catering Services Monitoring Cell set up with a
toll free number
(1800 111 321)
Rail Tourism
•
Launching multi-modal travel package in cooperation with Jammu & Kashmir state government
•
Issuing ‘Yatra Parchis’ to pilgrims travelling by rail to Mata Vaishno Devi Shrine at the time of railway ticket booking
•
Introduction of an educational tourist train with concessional fares - ‘Azadi Express’ – to connect places associated with freedom movement
•
Introduction of executive lounge at 7 more stations, namely, Bilaspur, Visakhapatnam, Patna, Nagpur, Agra, Jaipur and Bengaluru
IT Initiatives
•
‘Aadhar’
to be used for various passenger and staff related services
•
Internet ticketing from 0030 hours to 2330 hours
•
e-ticketing through mobile phones
•
Project of SMS alerts to passengers providing updates on reservation status
•
Covering larger number of trains under Real Time Information System
•
Next-Gen e-ticketing system to be rolled out capable of handling 7200 tickets per minute against 2000 now & 1.20 lakh users simultaneously against 40,000 now
Financial Performance 2012-13
•
Loading target revised to 1007 MT against 1025 MT in BE
•
Gross Traffic Receipts fixed at Rs. 1,25,680 cr in RE, short by Rs. 6,872 cr over Budget Estimates
•
Ordinary Working Expenses retained at BE level of Rs. 84,400 cr; pension payments increased by Rs. 1,500 cr to Rs. 20,000 cr
•
Dividend liability to government to be fully discharged
•
‘Excess’ of Rs. 10,409 cr as against the budget amount of Rs. 15,557 cr
•
Loan of Rs.3,000 cr taken in 2011-12 fully repaid along with interest
•
Operating Ratio of 88.8% as compared to 94.9% in 2011-12
Budget Estimates 2013-14
•
Freight loading of 1047 MT, 40 MT more than 2012-13
•
Passenger growth to be 5.2%
•
Gross Traffic Receipts to be Rs. 1,43,742 cr i.e. an increase of Rs. 18,062 cr over RE, 2012-13
•
Ordinary Working Expenses to be Rs. 96,500 cr
•
Appropriation to DRF at Rs. 7,500 cr and to Pension Fund at Rs. 22,000 cr
•
Dividend payment estimated at Rs. 6,249 cr
•
Operating Ratio
to be 87.8%
•
Fund Balances to exceed Rs. 12,000 cr
Annual Plan 2013-14
•
Highest ever plan outlay of Rs. 63363 cr
-
Gross Budgetary Support - Rs. 26,000 cr
-
Railway Safety Fund - Rs. 2,000 cr
-
Internal Resources - Rs. 14,260 cr
-
EBR - Market Borrowing - Rs. 15,103 cr
-
EBR - PPP - Rs. 6,000 cr
•
500 km new lines, 750 km doubling, 450 km gauge conversion targeted in 2013-14
Fiscal Discipline
•
No supplementary Demands for Grants introduced in Monsoon Session or Winter Session of Parliament
•
Loan of Rs. 3,000 cr repaid fully
•
347 projects prioritized with assured funding
•
Operationally important projects and also last mile projects to receive liberal funding
•
A new fund – Debt Service Fund – set up to meet committed liabilities
•
Stringent targets for efficiencies in maintenance of rolling stock and fuel consumption
•
Target to create fund balance of Rs. 30,000 cr in the terminal year of the 12th Plan
Staff Welfare
•
Fund allocation for staff quarters enhanced to Rs 300 cr
•
Provision of hostel facilities for single women railway employees at all divisional headquarters
•
Extending treatment facility in case of medical emergency to RELHS beneficiaries to all cities in hospitals empanelled with CGHS and Railways
•
Condition of barracks to be improved for RPF personnel
•
Provision of water closets and air conditioners in the locomotive cabs to avoid stress being faced by loco pilots
Training and Recruitment
•
1.52 lakh vacancies being filled up this year out of which 47000 vacancies have been earmarked for weaker sections and physically challenged
•
Imparting skills to the youth in railway related trades in 25 locations
•
Setting up of a multi-disciplinary training institute at Nagpur for training in rail related electronics technologies
•
Setting up of a centralized training institute at Secunderabad –
IRIFM
(Indian Railways Institute of Financial Management)