Rail Budget well thought out, non-populist: KPMG

Says it provides much needed headroom for the railways to make critical investments

Hailing the Railway Budget as "well thought-out" and non-populist, global consultancy KPMG today said it provides the much needed strategic financial headroom required for the railways to make critical investments in its modernisation and expansion plans.

"The much-needed support for PPP as a significant source of investment capital is the backbone of providing the strategic financial headspace," KPMG said in a statement.

The budget appears to be very well thought out and having something for all its stakeholders without being populist, it said.

“Indian Railway Budget this year is definitely a significant departure from the past in terms of focus on passenger amenities, adoption of technology, capacity building and commercial soundness. We also welcome the steps for creation of Project management Unit at Railway Board, Railway University, Strategic procurement policy including –procurement towards capacity building and long term robustness of IR operations", says Arvind Mahajan, Partner and Head of Infrastructure and Government Services, KPMG in India.

According to KPMG, using modern technology to enhance safety and security, as well as improving management by deciding to adopt an ERP (enterprise resource planning), is a welcome step.

“The budget appears to be very well thought out and has something for all its stakeholders without being populist.  It provides the much needed strategic financial headroom required for the railways to enable it to make the necessary critical investments into modernisation and expansion. The much needed support for PPP as a significant source of investment capital is the backbone for providing strategic financial headspace", says Jaijit Bhattacharya, Partner, Infrastructure and Government Services, KPMG.

"We hope that there is also a focus on energy efficiency in order to bring down the operational costs, thus improving operational profitability," the statement said.

"Fruits and vegetable transport via AC storage, if implemented is surely going to transform the food supply chain in India and could have positive impact on availability, quality and costs. Though FDI Railway sector is positive, it will be better if this is on infrastructure area rather than non-core areas", says S.V.Sukumar, Partner - Management Consulting, Head Strategy & Operations Practice, KPMG.

However, in addition to all the positive steps laid out in the rail budget, it would have been helpful if there was focus on non-traffic revenue generation to enhance profitability of railways, it said, adding measures should be adopted to enhance domestic capability for modernisation of railways.