INAUGURATING THE TWO day Economic Editors’ Conference at the National Media Centre, New Delhi, Jaitley referred to several sections of the economy that have been opened up for foreign investment and the simplification of procedures aimed at easing the environment for doing business. Recognising the role of market forces, the government has minimised its role in decision-making, he said.
The Finance Minister referred to the wide range of tax reforms, including the Goods and Services Tax (GST) initiated by the government. He said that major issues relating to GST have been resolved and it will be implemented from 1 April 2017. In parallel, reforms are also in the pipeline relating to direct taxes, he added.
Convened on 10 November, just two days after the Prime Minister’s announcement on demonetisation of high value currency notes, Jaitley spoke about the objectives of the measure and the steps taken to minimise hardship to the general public.
On the query on Tamil Nadu’s concerns of GST adversely affecting the state’s revenues, the minister referred to measures to compensate states for any fall in revenue for the initial five years, and expressed confidence over a large increase in tax collections.
Earlier, in his welcome address, Director General, Press Information Bureau, Frank Noronha said that the main objective of the conference was to provide a platform for interactions between senior finance journalists from different regions of the country and ministers and senior functionaries of the Government of India on key economic issues.
Rs. 8.56 lakh crore railway development plan…
Railway Minister Suresh Prabhu outlined a comprehensive plan to revamp the Indian Railways that would change the face of the organization over the next five years.
In a televised message, Prabhu stated that the railways have recorded a fall in freight traffic revenues due to sluggish manufacturing activity.
In a spirited and comprehensive presentation, A K Mital, Chairman, Railway Board, mentioned a massive plan to spend Rs 8.56 lakh crore on railway development for the next five years. This would focus on increasing capacity in the golden quadrilateral, dedicated freight corridors, railway electrification etc.
Mital referred to the massive improvements that would flow when the dedicated freight corridors linking Delhi with Mumbai and Amritsar with Kolkata are completed. “Such dedicated freight corridors would help increase average speed of freight trains from the present 25 kmph to 50 kmph. This will help reduce the delivery time. The present congestion caused by freight and passenger trains run on the same tracks would change. The shift of freight traffic to dedicated lines would release a lot of capacity for increasing the number of passenger trains and will help run them at faster speeds of 160 kmph against the present maximum speed of 80-100 kmph,” added Mital.
A welcome aspect of the plan relates to a big step-up in the electrification of railroads.
The Railway Board Chairman said that the merger of the railway budget with the general budget would help in a holistic approach to develop the transport sector optimising the capacities of railways, roads, air, inland waterways and coastal modes of transportation for both passengers and goods. An immediate benefit, Mital pointed out, will be saving of Rs 9500 crore paid annually as dividend to Central government.
All these sound impressive. I raised the issue of the southern region as a whole, not much seen in the radar of railway development. I pointed out to the Railway Chairman that the humongous investments made on the high-speed train linking Ahmedabad and Mumbai (an outlay of around Rs 95,000 crore), the budget for upgrading suburban rail traffic in Mumbai (Rs 56,000 crore), and the dedicated freight corridors which together may involve an outlay of Rs 100,000 crore, all go to the north, east and west. Mittal mumbled about some odd expenditure on improving railway stations in the south!
I re-submitted my suggestion at an earlier EEC to the then Railway Minister, Mamata Banerjee: to levy a cess on freight and non-suburban passenger tickets that can help raise over Rs 3000 crore that can be expanded through loans of another Rs 9000 crore to fund construction of new rail lines. Mital didn’t respond.
On the same lines, the railways can consider working with large public sector companies like BHEL, NTPC, SAIL, and NLCto set up power projects in different regions to ensure steady availability of power at modest costs. A beginning can be made by setting up such a plant at the huge expanse of land available with Salem Steel Plant of SAIL The concept can be further expanded by setting up a rail coach production facility at Salem along with SAIL to make use of the large quantum of stainless steel produced at SSP.