New Delhi

Corporate leaders termed the Rail Budget as “innovative” with a thrust on modernisation and said proposals contained in it present a clear roadmap and vision for the overall transformation of the Indian railways.

Sunil Kant Munjal, Hero MotorCorp Joint MD and former CII president, said, “By initiating measures to improve the operational efficiency of Railways and introducing innovative financial mechanisms such as engagement of pension funds and other long-term debt instruments, the Budget has sought to improve its competitiveness.”

Similarly, moves at resource mobilisation by strengthening the PPP model and also through new technologies, will go a long way to turnaround rail operations, he said.

“These measures will lead to greater efficiency and result in the Railways becoming the preferred mode of transport for passengers as well as goods,” Munjal said.

Godrej Group Chairman Adi Godrej said Railway Minister Surech Prabhu has introduced a number of “innovative” steps to increase revenue.

“The roadmap laid for attracting private investment through tapping low-cost long-term funds from insurance and pension funds, multilateral and bilateral agencies, forming JVs with IRFC or existing NBFC of a PSU, creating a holding company to raise long-term debt etc will go a long way in boosting the cash-strapped sector and facilitate completion of many crucial rail projects,” Godrej said.

L&T Finance Holding Chairman Y M Deosthalee described the Budget as “a vision statement accompanied by a decisive roadmap to make Railways a viable transportation model by transforming it from being cost-centre to a profit centre.

This is evident in budgeting to achieve a lower operating ratio of 88.5 per cent and higher levels of efficiencies.”

On the Minster’s plan to augment funds from the market, Deosthalee said the proposal to introduce structural and systemic reforms to create infrastructure through market borrowing is a welcome step. So is the move to bring in public private participation to generate sustainable revenue.

The sharp 52 per cent increase in planned expenditure to Rs 1 trillion for FY16 provides the much-needed spending push, he noted.

Ajay Shriram of Shriram Group and CII President said Prabhu has unveiled a comprehensive plan for modernisation of the Railways.

“The proposed Rs 8.5 trillion capex over the next five years would result in a truly modern rail system which would significantly propel economic growth,” he said.

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