Budget 2021: A Beacon Of Hope For Department Of Railways

Budget 2021: A Beacon Of Hope For Department Of Railways

Indian Railways have been a loss-making unit since time immemorial. Would a 2020 request made by the Railways to the Budget Committee be heeded to in 2021?

Crux of the Matter

The Background

  • As claimed by V.K Yadav, Chairman, and CEO of Railway Board, about 25% of the railway’s earnings or ₹50,000 crores are consumed by the pension expenses of its former employees. 
  • Owing to its existing economic constraints, Railways had asked the Finance Ministry to set up a separate Pension Fund for Railways, which was not paid attention to in the budget of 2020. 

Pay Commission Revisions
Railway Minister Piyush Goyal claimed that with the implementation of 7th Central Pay Commission, the salary expense of Railways have gone up by ₹28,000 crores – this amount borne by Railways is ~30% of the total increased financial burden of
PSUs due to the 7th CPC.

Why The Demand For Separate Pension Fund?

  • 25% of the railways’ earning goes into paying the pensions to 15.5 lakh former employees.
  • The expense of pension fund is further expected to increase further with about 40% of railways staff being above 50 years of age in 2016 -17.

Final Thoughts
Will Budget 2021 prove to be a saviour for the plunging Railway Department? Will Finance Ministry this year be paying any attention to creating a different pension fund for Railways? Well, only time will tell.

  • The first Union budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947. Morarji Desai has presented 10 budgets which is the highest count followed by P Chidambaram’s 9 and Pranab Mukherjee’s 8.
  • Until the year 1999, the Union Budget was announced at 5:00 pm on the last working day of the month of February. All that budgets seemed to do was to raise taxes, a presentation in the evening gave producers and the tax collecting agencies the night to work out the change in prices. It was Mr Yashwant Sinha, the then Finance Minister of India who changed the ritual by announcing the 1999 Union Budget at 11 am.
  • In 2016, departing from the colonial-era tradition of presenting the Union Budget on the last working day of February, Minister of Finance (India) Arun Jaitley announced that it will now be presented on 1 February. Additionally Rail Budget, presented separately for 92 years, merged with the union budget.

Indian Railways’ Privatization: What To Expect?

Indian Railways Privatization: What To Expect?

The declaration of Privatization of Indian Railways occurred along with several new records made, all adding to its long history of service.

Crux of the Matter

India’s Longest Train
Indian Railways recently operated the train ‘SheshNaag’, which is the longest train of India, measuring 2.8 km for length. The operation took place in the South East Central Railway zone.

The train contains 251 wagons and 4 empty BOXN rakes and is powered by 4 electric locomotives.

Transforming Timetable
Indian Railways would implement a new timetable system, in which the schedule and frequencies of trains would be completely rewritten. A reduction of halts is expected, which would reduce the travel time for passengers. Furthermore, trains with low occupancy would be canceled.

In another record, all 201 trains run on 1 July observed ‘zero delays’, making it the first time that Indian Railways achieved 100% punctuality.

Indian Railways-Privatization
Indian government recently initiated the ‘Privatization‘ of railways, where private firms would operate on 109 routes initially while using 151 modern trains. The manufacturing of such modern trains would come under the ‘Make In India‘ scheme. The operations are expected to start in April 2023, with the trains capable of reaching the maximum speed of 160 km/h.

The firms operating would decide the fare for the next 35 years, which might increase fares along with the facilities provided.

Help In Times Of Covid-19
Indian government also operated ‘Shramiktrains to transport stranded migrant workers, and has transported ~6 million passengers to their respective places.

Besides transporting workers, Indian freight trains transported 4.58 million tonnes of food grains between 1 and 22 April alone.

An Excerpt From History Of Private Trains
‘Robber Baron’ is a term used for American Businessmen of the 19th century, who used unfair practices and controlled the majority of the country’s wealth. Several of such business tycoons gained control over American Railways and exploited them to advance personal business interests. Some notable examples of railroad Robber Barons are John Rockefeller, Leland Stanford, Jason Gould, Charles Crocker, and Cornelius Vanderbilt.

History Of Indian Railways

  • 16 April, 1853: India’s first passenger train runs between Bori Bunder (Mumbai) and Thane on a Broad gauge track.
  • After 1857 rebellion, the East India Company took back contracts from external agencies and expanded total length from 4,000 miles in 1867 to 9,000 miles in 1880.
  • 3 February, 1925: First electric trains runs between Bombay and Kurla.
  • 1984: India’s first metro system opened in Calcutta.
  • 2016: Gatimaan express becomes India’s fastest train with top speed of 160 km/h.
  • According to Hindu mythology, Sheshnag means the king of snakes. It is believed by the Hindus that Sheshnag stays in the Sheshnag Lake, situated at the track leading to Amarnath cave 23 kilometers from Pahalgam in the Kashmir valley.
  • The term, Robber Baron, was based on an analogy to the German robber barons, local feudal lords or bandits in Germany who waylaid travelers through their ostensible territory, claiming some tax or fine was owed.
  • Vivek Express is a chain of express trains on the Indian Railways network. One of the Vivek Express trains, the one from Dibrugarh to Kanyakumari, is the longest route on the Indian Railways network, in terms of distance and time, and is currently the 24th longest in the world. It covers a total of 4234 km from Dibrugarh to Kanyakumari. It takes 79 hours to cover this distance with 57 intermediate stoppages.

How To Travel By Air & Rail During Lockdown

After a break of around 2 months, domestic flights resumed from 25 May, 2020. A similar restart would be observed in Railways’ case, where trains will restart from 1 June, 2020 after a brief restart in mid-May. Air and Rail travel would commence with new safety protocols for passengers.

Crux of the Matter

Air Travel – What To Keep In Mind?
Following protocols would have to be observed by the passengers for domestic flights:

  • Thermal scanning would be mandatory.
  • Aarogya-Setu app is compulsory for passengers.
  • Passengers from containment zones would not be allowed to the flight.
  • Flights would be operating at 1/3rd of the total capacity to maintain social distancing norms.
  • Reporting time would be 2 hours before the departure to facilitate testing.
  • Only 1 cabin bag and 1 check-in bag would be allowed.
  • A face mask is compulsory for the airport and during the flight journey.
  • Only online check-ins would be available to avoid physical contact.
  • All baggage would be sanitized.
  • No provision of meals on the flight.
  • Passengers would be allowed to bring dry food but advised not to eat in the flight as the process would require the removal of safety masks.

Different States, Different Measures
Different states have applied different measures for quarantine as well as the number of operating flights.

All passengers would be put on a 14-day quarantine, with the passengers being distributed equally in home quarantine and government quarantine.

Jammu & Kashmir
All passengers would be put in govt quarantine for 14 days. Afterward, they would be tested for the Coronavirus and would be allowed to leave only if found negative.

West Bengal
West Bengal would be starting flights from 28 May due to the recent cyclone Amphan. The state would begin with 20 flights daily.

All passengers would be put in home quarantine for 14 days.

Maharashtra would be allowing only 25 takeoffs and 25 landings per day initially, with the number to be increased in due time.

Railways To Resume With Protocols
Indian Railways would resume 200 trains from 1 June 2020 after a 2 months hiatus with a brief restart occurring in mid-May. The trains would have both A/C and non-A/C coaches. Bookings would be done only online, with no provision of offline reservations currently. Similarly, no tatkal or premium booking would be available. Passengers have to report 1.5 hours before the departure time for safety procedures. Thermal scanning would be compulsory, and only asymptomatic passengers would be allowed. The first chart would be prepared 4 hours before the departure time.

  • Aviointeriors S.p.A. is an Italian manufacturer of airline seats. Aviointeriors last month released a rendering of its “Janus” seat, which uses a glass partition and a reversed middle seat to mitigate the risk of spreading the coronavirus.
  • In journalism, the jet set is a term for an international social group of wealthy people who travel the world to participate in social activities unavailable to ordinary people. The term came from the lifestyle of traveling from one stylish or exotic place to another via jet plane. The phrase came into existence post-war era, during the jet-age.
  • Air India’s mascot, the Maharajah was created by Bobby Kooka, the then-commercial director of Air India, and Umesh Rao, an artist with J. Walter Thompson Limited in 1946. The Maharajah was given a makeover in 2015 and the brand is represented by a younger version.

IR Deploys Its Most Powerful Engine

WAG12B of IR

Indian Railways (IR) acquired the first 12,000 HP electric locomotive under the Make in India initiative. Railway Minister Piyush Goyal is confident that introduction of this locomotive in IR would increase its efficiency and reduce carbon emission.

Crux of the Matter

Boost to Indian Railways
Indian Railways (IR) manufactured eight WAG12B locomotives under the ‘Make in India’ initiative. This locomotive is equipped with 12,000 HP engine which will give a maximum speed of 120 km/hr and produces energy to haul 6000 tonnes of weight. It relies on low power cables for its energy and is equipped with LED lights. Being a fully electric-based locomotive, WAG12B will help reduce carbon emission and therefore is being termed as ‘green loco’. It is also equipped with regenerative braking systems. The regenerative braking system stores the kinetic energy produced while applying brakes.

It is manufactured under the €3.5 billion deal between Alstom and IR. In total 800 fully electric locomotives will be produced under this deal. IR has also signed a contract with Alstom Railway Services in which the latter would provide 11 years of service. Further, the WAG12-class locos will be used to power trains on Indian Railways’ Dedicated Freight Corridors (DFCs) and conventional corridors.

Other Feats
Nearly 20 lakhs migrant workers have been ferried by 1,565 ‘Shramik Special’ trains since 1st May 2020. 1700 migrant workers were ferried in one train instead of 1200 so that the maximum number of workers can reach their destinations. IR also announced the commencement of 200 non-AC passenger trains from June 1.

On May 12, Indian Railways resumed 15 pairs of trains connecting Delhi with Dibrugarh (Assam), Agartala (Tripura), Howrah (West Bengal), Patna (Bihar), Bilaspur (Chhattisgarh), Ranchi (Jharkhand), Bhubaneswar (Odisha), Secunderabad (Telangana), Bengaluru (Karnataka), Chennai (Tamil Nadu), Thiruvananthapuram (Kerala), Madgaon (Goa), Mumbai Central (Maharashtra), Ahmedabad (Gujarat) and Jammu Tawi (Jammu and Kashmir).

  • Jean Joseph Étienne Lenoir also known as Jean J. Lenoir was a Belgian engineer who developed the internal combustion engine in 1858. Lenoir’s engine was commercialized in sufficient quantities to be considered a success, a first for the internal combustion engine.
  • The Great Indian Peninsula Railway was India’s first passenger railway, which was headquartered in Bombay. It was taken over by the Government in 1925 and was later (in 1951) incorporated into the Central Railway (and by extension, the current state-owned Indian Railways).
  • The first full-scale working railway steam locomotive was built in the United Kingdom in 1804 by Richard Trevithick, a British engineer born in Cornwall. This used high-pressure steam to drive the engine by one power stroke. On 21 February 1804, the world’s first steam-powered railway journey took place when Trevithick’s unnamed steam locomotive hauled a train along the tramway of the Penydarren ironworks, near Merthyr Tydfil in South Wales.

Passenger Trains To Restart From Tomorrow

After more than a month’s pause, Indian Railways would be starting passenger trains on selective routes to restore people’s movement, slowly easing the lockdown. 15 pairs of train would function between New Delhi and 15 stations across India.
Complete Coverage: Coronavirus

Crux of the Matter

Railways and Lockdown
Indian railways had stopped all passenger trains since 23 March 2020 as a part of national lockdown. The government launched Shramik Special trains to help migrants labour reach their homes. Since its start from 1st May, around 3.4 lakh workers have been transported. Goods trains were kept functioning to transport essential goods. However, they are operating at 60% of their capacity due to subdued demand because of lockdown.

Relief for passengers
Indian Railways announced that 15 pairs of trains would operate between New Delhi and other 15 stations, starting from 12 May 2020. The booking will start at 4:00 PM on 11 May 2020.

However, passengers have to adhere to the following rules:

  • Tickets can be booked online only
  • No concession would be given and no tatkal booking will be allowed
  • Entry to the railway station prohibited without a ‘confirmed ticket’
  • Passengers expected to reach station 1 hour before departure for COVID-19 checking procedures
  • Only asymptomatic people allowed to board the train
  • Masks would be compulsory at departure.
  • Blankets and food will not be provided by the railways to avoid contagious spreading

Indian Railways: History and effect of Lockdown
Indian Railways is the 4th largest rail network in the world, measuring 67,358 km in length. It is also the world’s 8th largest employer, with a staff of more than 1.3 million workers. In 2019, it reported a revenue of ₹1.97 trillion and a net income of ₹60.14 billion.

The nation-wide lockdown has made deep effects on the Railway system. The passenger trains were shut down from 23rd of March, making it the longest shutdown since the strike in 1974, which demanded wage improvement and easing of work hours. On average, ₹150 crores were earned by passenger fair daily, which amounts to a loss of more than ₹7000 crores since the lockdown.

  • IRCTC (Indian Railway Catering and Tourism Corporation) held an initial public offering (IPO) on the National Stock Exchange on 30 September 2019, the IPO got oversubscription of 112 times. The base price of shares was set between ₹315 and ₹320 per share for the IPO. When the listing went live on 14 October 2019, the share price opened at ₹625 and ₹646 on NSE and BSE respectively and rose massively from there. The IPO has reduced Indian Railways’ shareholding in the company to 87.40%.
  • General Sir Arthur Thomas Cotton was a British general and irrigation engineer. He built Red Hill Railway, India’s first train. Red Hill Railway ran from Red Hills to the Chintadripet bridge in Madras in 1837.
  • The 1974 railway strike in India was a major strike by the workers of Indian Railways in 1974. The 20-day strike beginning 8th May 1974 by 17 lakh workers was the largest industrial action in the world.