New Delhi, February 25

Indian Railways said today it would pump $17.6 billion into its decrepit, loss-making network in the coming year, a fifth more than this year, but the government shied away from raising fares as it eyes crucial state elections.

The world’s fourth-largest rail network, saturated and slow after years of underinvestment, is one year into a five-year $137 investment plan that Prime Minister Narendra Modi is betting on to overhaul the network and boost economic growth.

But it is facing a massive increase in labour costs and slowing growth in both passenger and freight revenue.

Presenting the annual rail budget for 2016-17, Railway Minister Suresh Prabhu said the railways need more revenue to offset a $4.7 billion rise in its wage bill, and to fund the 21 per cent rise in the budget to INR 1.21 trillion ($17.6 billion).

“These are challenging times ... We are faced with two headwinds, entirely beyond our control; tepid growth of our economy’s core sectors due to an international slowdown and looming impact of seventh pay commission,” Prabhu said.

Modi has prioritised overhauling India’s dilapidated infrastructure in his first 20 months in power, but his government is expected to focus on more populist spending measures in Monday’s union budget, making fare hikes tough to justify.

Some 23 million, mostly poorer, people use the trains every day, but they generate little extra income to improve services as fares are heavily subsidised. A 3,150 km trip between New Delhi and Thiruvananthapuram can cost just INR 590, not much than a trip on underground in London.

The government will hand the railways INR 450 billion in funding for next year, up 12.5 per cent on this year, but most of that will be sucked up by the wage bill rise. It is in rising revenues that Prabhu said he will find the cash to keep the modernisation plan on track.

The railways is predicting a rise in revenue receipts to INR 1.85 trillion next financial year, a 10.1 per cent rise on this year. That compares with the seven per cent rise over last year as fewer-than-expected travellers caught the train. The railways will also seek to increase share of non-tariff revenue, from areas like advertising and station redevelopment.

Modernisation drive

NEW DELHI: India on Thursday said it will roll out wi-fi to hundreds of stations, install 17,000 high-tech toilets on trains and professionalise its unskilled porters, or ‘coolies’ under a drive to modernise its creaking railways. “For ensuring delivery of quality services to its customers, Indian Railways needs to be equipped with modern and cutting edge technology,” Railway Minister Suresh Prabhu said presenting the rail budget. He cited a landmark deal with Japan in December to build India’s first bullet train, which will slash journey times between Mumbai and Ahmedabad. Indian Railways would ‘collaborate with the best in the world’ to modernise its trains and rail infrastructure, he said. A partnership with Google will see it extend free wi-fi to 400 more stations within two years after the service hits 100 stations this year, he said. The railway operator will also install on trains 17,000 additional ‘bio-toilets’ by end of this fiscal year, Prabhu said. Station baggage carriers, known by the derogatory name ‘coolies’ after the indentured labourers who served in the British imperial era, would be given uniforms and training in soft skills, he said. The porters would henceforth be known as ‘sahayaks’, which translates as ‘helpers’ in Hindi ‘in line with evolving image of Indian Railways’, he said. — AFP