New Delhi: Not one word of caution or displeasure. All the three prominent business chambers of India spoke in one voice when they showered words of praise on Suresh Prabhu for various announcements this afternoon. Never mind the proposed increase in freight rates which could fuel inflation, at least in some commodities. The chambers also seemed to collectively skirt uncomfortable questions such as how will the ambitious operating ratio for FY16 at 88.5 percent be actually achieved.
But stock markets did not seem to approve of everything Prabhu has proposed today. According to agency reports, the BSE Sensex plunged by over 261 points, logging its worst fall in two weeks, to close below the key 29,000 level as the Rail Budget disappointed market participants. Stocks of cement, coal and steel companies suffered losses following hike in railway freight rates by up to 10 percent.
But business chambers were upbeat. The director general of the Confederation of Indian Industries (CII), Chandrajit Banerjee, called this a ‘caring’ budget saying “This cares for the customer. This cares for the environment. This cares for the stakeholders, including the Railway PSUs and the Rail employees and of course this cares about the economy”.
The secretary general of the Federation of Indian Chambers of Commerce and Industry, A Didar Singh, noted that proposal of the railways minister to invest Rs 8.5 lakh crore in next five years is encouraging. Assocham president Rana Kapoor and CII president Ajay Shriram agreed with Singh and also lauded this investment outlay which would tap various resources such as monetization of surplus land resources and pension funds.
Not just business chambers, other sector experts were also all praise for Prabhu’s long term vision for the railways. Abhaya Agarwal, Partner and PPP Leader at EY India said, “Aiming investments towards completion of ongoing projects and projects in congested corridors is the right step towards improving productivity and making Indian Railways financially self-sustainable…..A number of initiatives are directed towards improving the customer experience in ticket reservation and journey. Detailed energy audit, procurement of power through bidding and setting up of 1000 MW will go a long way in bringing down the much needed energy and fuel expenses.”
Chairman of BMR Advisors Mukesh Bhutani also praised the Railways minister for identifying distinct measures for resource mobilisation through ‘institutionalization of assets’ under PPP model of development. But added that “No details of FDI liberalisation in rail projects and idea (or lack thereof) on long term financing took me by surprise; perhaps, the government is taking one step at a time! Overall impression – budget for rail reforms!”
The executive director, Mobility at Siemens Tilak Raj Seth said “the Rail Budget 2015-16, emphasizes on an execution strategy and action plan for the transformation of the Railways. I would rate this Railway Budget as very positive, as it would be beneficial for the industry, Siemens businesses and people at large”.