[Infrastructure] Rail-Budget 2014, Tariff Authority, Biodiesel, Biotoilets, FDI & more

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  1. Prologue
  2. [Act 1] Railways: GK & Static Theory
    1. Railway budget vs General Budget
    2. Railway Gauges (British Legacy)
    3. Railways: Train types
  3. [Act 2] Railways: Current / Contemporary topics
    1. C1: Pir Panjal Tunnel, Qazigund Banihal
    2. C2: What is Cross subsidization in Railways?
    3. C3: What is Operating Ratio of Railways?
    4. C4: Fuel Linked Tariff policy
    5. C5: Rail Tariff Authority
  4. [Act 3] Railways: Clean energy- sanitation measures
    1. CE1: 5% Biodiesel in Railways
      1. What is Biodiesel?
      2. What’re the Benefits of Biodiesel?
      3. Jatropha plant: Basics
    2. CE2: Bio-toilets
    3. CE3: Green curtain (interim budget)
    4. CE4: Clean energy Company
  5. [Act 4] Rail Budget 2014
    1. Passenger amnesties, Railway Food
    2. Ticket booking, Rail Hygiene
    3. Passenger safety, Ultra Sonic Rail breakage
    4. RAIL TOURISM, Udhampur Katra
    5. Metros, Diamond quadrilateral
    6. Bullet train, Rail training
    7. Agriculture, Parcel biz
    8. E-governance /ICT initiatives
  6. [Act 5] Economic Survey Fodder
    1. F1: Challenges of Indian Railways
    2. F2: FDI in Indian Railways
    3. F3: PPP/Infra/FDI (Rail budget 2014)
    4. F4: Rail reforms in 2013
  7. Appendix: Stupid statistics


Economic Survey Ch11. Energy, Infrastructure and Communications. Total three subparts

  1. Energy
  2. Infrastructure: highways, shipping, aviation
  3. Railways infrastructure (you’re here, first two parts coming soon).

[Act 1] Railways: GK & Static Theory

Economic Survey ch11 Indian Railbudget topics index

Railways Timeline
  • Mumbai to Thane (34kms)
  • under Governor General Dalhousie
1854 Calcutta to Raniganj
1856 Madras to Arkonam
1924-25 Rail budget separated from general budget (Acworth). Acworth gave report in 1921. But they separated in 1924.
2010 Kolkata metro declared the 17th Rail zone
2013 fuel linked tariff policy
  • Mumbai: new Monorail, new metro-rail.
  • Naharalagun: new railway line to connect Itanagar (Arunanchal Pradesh) with rest of India

Railway budget vs General Budget

  • 1924-25: The British started separate rail budget on Acworth Committee recommendations
  • Indian constitution does not provide for separate railway budget or budget in parts.
  • But Parliament rules of procedure of Parliament permit it.
  • Although rail budget’s receipt and expenditure are also shown in General budget. Observe following:
General Budget: Revenue part
receipt (incoming) Expenditure (outgoing)
tax non tax
dividend from railways counted here. Grants given to railways counted here


General Budget Capital part:
receipt (incoming money) Expenditure (outgoing)
  • Money received from disinvestment counted here
  • e.g. if Rail ministry sold its shares from one of its PSUs.
loans given to railways

Parliamentary convention committee reviews the railways’ contribution to general budget.

Railway Gauges (British Legacy)
Gauge size
  • 1,676 mm (5 ft3″)
  • British used it to send raw material from Indian hinterland to port cities
Meter 1,000 mm (~3ft3″)
Narrow 762 mm; 610mm (lift gauge)
  • Ranking track length in India: broad > meter > narrow
  • Project uni-gauge: to convert selected routes into broad gauge.

Railways: Train types

List not exhaustive
DEMU Trains
  • same as above but with diesel engine
  • Diesel multiple unit
  • Duranto means,” restless” in Bengali
  • Long distance non stop from source to destination
  • as fast as Rajdhani and Shatabdi
Express Trains speed ~160 kmph
Garib-rath AC trains for poor people- at cheaper cost. But seat space narrow, no food/bedding given.
  • They’ve no reservation seats.
  • They’ve only general coaches. No AC coaches.
  • They’re run to handle rush season e.g. summer vacation.
  • Modi Railbudget promised to run more such trains on popular routes.
MEMU Trains
  • Mainline Electric Multiple Unit
  • suburban trains.
  • has multiple motors for each car I.e., the same car that carries passengers also has electrical engine
Premium Trains/Jai Hind express
  • Trains for the high end passengers
  • Dynamic fare system based on demand. Principle similar to air tickets
  • Regular fare will not be applicable
Rajdhani Connects Delhi with state capitals. Started in ‘69
Red ribbon to spread AIDS awareness
  • Connects Metro cities with other cities.
  • called “Shatabdi” because started in ‘88 Nehru’s centenary.

[Act 2] Railways: Current / Contemporary topics

C1: Pir Panjal Tunnel, Qazigund Banihal

Railway Pir Panjal tunnel

Qazigund Banihal section Pir Panjal
IRCON ltd built it Hindustan Construction company
~18km long rail section
  • 11.2 kms tunnel.
  • Longest rail tunnel in India, 2nd longest in Asia. 1st longest is in China.
Joins Qazigund (Kashmir) with Banihal (Jammu) Pir Panjal: is name of the tunnel on that section. (Technical name T-80 tunnel)
next project: connecting Udhampur Banihal (2017)
  • built with New Austrian tunneling method. First time in India
  • Passes ~450m below the existing Jawahar Road tunnel.

Before moving to Rail Tarrif authority, we need to learn two definitions:

C2: What is Cross subsidization in Railways?

  • To keep rail travel cheap for the poor people, Railways keeps the passenger tickets lower than its input cost. = obviously loss making. (23 paise per passenger per kilometer in 2013. In 2001, it was 10 paise.)
  • To compensate this loss, Railway keeps freight (goods transport) prices higher. This is called “Cross subsidization”.

C3: What is Operating Ratio of Railways?

  1. Railway’s Operating Ratio is 94%.
  2. Meaning they spend 94 paise out of every rupee earned. Only 6 paisa left in surplus. (This is Rail minister’s explanation in his budget speech 2014)

C4: Fuel Linked Tariff policy

  • Fuel (diesel and electricity)= ~17% of the Railways’ total operation cost.
  • So, if railways wants to improve its “operating ratio”, it must keep changing fares depending on fuel cost.
  • Therefore, (UPA-II) Rail budget 2013 announced “Fuel adjustment component” (FAC)
High Speed Diesel (HSD) 7.3%
Electricity 15.5%.
  • FAC is Dynamic in nature- fares can be reduced if fuel becomes cheaper.
  • To be Revised every 6 months.
  • Last time fares revised in October 2013.
  • So next revision should have been done in April/May 2014. But Congress Government didn’t do it (for vote bank / model code of conduct).
  • June 2014: (Modi) Government raised passenger ticket price by ~14%, and freight charges by 6.5%. Because of the same Fuel-linked pricing policy.
  • This will improve railways’ income by 8000 crore Rs. But even this much money insufficient to finish past projects. (we need 50,000 crores every year for next ten years.)

C5: Rail Tariff Authority

  • Railway makes 23 paisa loss per passenger, per kilometre. Therefore, need to raise prices.
  • 2014: interim budget announced setting up the Rail Tariff Authority (RTA).
  • Chairman + 4 members.
  • To advise the government on prices for both passenger trains and good trains.
  • Depending on input cost and volatile market conditions.
  • Will improve fare : freight ratio
  • Will reduce the cross subsidization between freight and passenger train operations.
  • But, under the Railway Act, only the Railway Board can decide on the prices of rail services.
  • So, RTA has been established through an executive order. Just like UIDAI.
  • However, Modi’s rail budget is silent on this issue.

[Act 3] Railways: Clean energy- sanitation measures

four topics: Biodiesel, Biotoilets, Green curtain, Clean energy  company.

CE1: 5% Biodiesel in Railways

Biodiesel chemical process formula

What is Biodiesel?

  1. Biodiesel is a fuel manufactured from animal or vegetable fats
  2. It has physical properties very similar to the diesel obtained from crude oil
  3. Reaction
  4. (Animal or plant) fat + Alcohol (Methanol or Ethanol) + Catalyst + high temp + high pressure=> Glycerin + Biodiesel.
  5. Chemically, Biodiesel is Methyl Ester (if methanol used) OR Ethyl Ester (if Ethanol used)
  6. Glycerin is separated and used in soap-cosmetic industry. If Glycerin is not removed from biodiesel, then it’ll block the fuel filters.

What’re the Benefits of Biodiesel?

  1. Simple to use, biodegradable, nontoxic, rich in oxygen.
  2. Free of sulfur and aromatics. Thus reduces GHG emission, air pollution and public health risk.
  3. Biodiesel can be blended at any level with (real) diesel.
  4. Thus biodiesel will reduce our dependence on imported fossil fuel => less current account deficit.
  5. Railways need ~2 billion litres of diesel every year. We can manufacture ~500 tonnes of biodiesel from Jatropha and Karanjia alone. These plants are non-edible and can be grow on wasteland.
  6. offers new energy-related markets to farmers.
  7. 2002: 5% blended Biodiesel used on a Shatabdi engine. Trial was successful.
  8. 2003: Railways signed an MoU with Indian Oil Corporation ahd gave ~500 land for Jatropha cultivation. IOC in return promised to supply Biodisel for 15 years.
  9. 2014: Modi’s railway budget permitted 5% blending of biodiesel with (real) diesel.

Jatropha plant: Basics

  1. Originally from South America and Africa
  2. Family Euphorbiaceae.
  3. Greek: Jatros = Doctor, Jatropha = nutrition.
  4. Hindi: Bagh Eranda, Jangli Eranda, Safed Eranda
  5. Gujarati | Punjab = Jamal Gota.
  6. Purgative and toxic.No animals eat it.
  7. Can grow in wasteland, arid areas. Can withstand frost and drought.
  8. Jatropha seed=> oil => Plant fat =>Biodiesel.

CE2: Bio-toilets

  • 1994: DRDO sets up first biotoilet in Ladakh. Later tied up with Indian railways.
  • 2012: Rural Development ministry tied up with DRDO to install bio-toilets under Total sanitation mission /Nirmal Bharat Abhiyan.
  • There is a bio-digester tank in every toilet, contains 4 type of anaerobic bacteria.
  • They digest the human excreta, via four steps: hydrolysis, acidogenesis, acetogenesis and methanogenesis.
  • No bad smell, don’t need large space, no human excreta in toilets or tracks – hygiene and cleanliness
  • converts human excreta in to water (irrigation) and methane gas (cooking)

CE3: Green curtain (interim budget)

  • Railways will construct boundary wall round the station.
  • Then watchmen will patrol the area.
  • Anyone caught urinating/defecating/littering in this area, will be punished.
  • Landscaping and plantation near the stations.
  • Pilot project @Agra and Jaipur. If project success= then Railways implement it in all stations, and outsource this “chowkidaari” to private companies.
  • Companies act 2013 mandates certain companies to spend 2% of their profit on CSR (corporate social responsibility) activities. This chowkidaari will be counted as one of the CSR activity.
  • Modi budget: CCTV cameras to monitor cleanliness

CE4: Clean energy Company

  • Railways has setup Railway Energy Management Company (REMC)
  • This company sets up windmill plants, solar power plants on railway buildings. Gets 40% subsidy from Ministry of New & Renewable Energy.

[Act 4] Rail Budget 2014

Combining all announcements from rail budget and general budget. MCQ worthiness low, but can serve as mains fodder here and there. 

Passenger amnesties Railway Food
  • Foot-over bridges, escalators and lifts at all major stations via PPP route.
  • Will involve individuals, NGOs, Trusts, Charitable Institutions, Corporates, etc. to provide passenger amenities at stations
  • Workstations for businessmen inside in select trains on payment basis.
  • Battery-operated cars for physically disabled.
  • Will Introduce Pre-cooked (Ready-to-eat) Meals.
  • Quality Assurance Mechanism through Third Party Audit
  • Food quality feedback through IVRS mechanism, from the travelling passengers.
  • Food Courts at major stations. Can order regional cuisine while onboard, through emails/phone.
Ticket booking Rail Hygiene
  • Next Generation e-Ticketing System. Will book 7200 tickets per minute, will allow 1.2 lakh users simultaneously.
  • Coin Operated Automatic Ticket Vending Machines.
  • Parking-cum-Platform Combo Tickets to save passenger time.
  • Online booking facility of Railway Retiring Room
  • Will outsource the cleaning activities at 50 major stations to professional agencies.
  • Helpline number will be printed on the back of all PRS tickets
  • more Bio-toilets
  • Mechanized Laundries in order to improve quality of the bedrolls provided in AC Coaches.
  • RO drinking water units at Stations and in trains.
Passenger safety Ultra Sonic Rail breakage
  • 38% of Rail crossing are unmanned. We’ll eliminate them by constructing of Road-under-bridges and Road-over-bridges.
  • Automatic closing of doors before start of train- in selected coaches.
  • Railway protection force (RPF) escorting teams in trains. Distressed passengers can call them via helpline.
  • Will implement Ultra-sonic rail breakage detection system (explained in next column)
  • To detect breaks in the rail/weld of the tracks and allow preventative actions.
  • System propagates ultra-sonic waves to detect break on the tracks. System alarms if breakage is more than 15mm.
  • measures pulse intervals to pinpoint the place of crack. Helps in quick reparation.
RAIL TOURISM Udhampur Katra
  • Will promote Eco-Tourism and Education Tourism in North Eastern States.
  • Special Pilgrim Circuits like Devi Circuit, Jyotirling Circuit, Jain Circuit, Christian Circuit, Muslim / Sufi Circuit, SikhCircuit, Buddhist Circuit, Famous Temple Circuit etc.
  • Special train to spread awareness on Swami Vivekananda and his moral lessons.
  • Katra= @foothills of Vaishno Devi shrine.
  • Every year ~95 lakh people visit this shrine.  But since there is no direct rail connectivity =have to travel by road.
  • Therefore new rail line to connect Udhampur & Katra
Metros Diamond quadrilateral
  • Budget 2014: money for metro projects in A’bad and Lucknow (100 crore total)
  • planning metro projects for cities with >20 lakh population
  • (Rail budget) Will increase train speed to 160-200 kmph in selected routes, to decrease travel time.
  • announced diamond quadrilateral to connect all metros (next column)
  • To connect major metros through High Speed Rails.
  • The project is modelled on the Golden Quadrilateral of National Highways
  • Proposed routes: Mumbai-Ahmedabad, Howrah-Haldia, New Delhi-Patna and Hydrabad-Chennai
  • Sought help from Japan, France and China.
  • Related topic: Dedicated freight corridor, discussed in second part along with (road) industrial corridors– for better revision and trickier MCQs.
Mumbai-A’bad bullet train Rail training
  • Length: 520 km; proposed speed ~320-350 kms.
  • Duration: 3-4 hours (currently 8 hours)
  • Project funded by JICA (Japanese International Cooperation Agency)
  • JICA doing survey. Report in 2015
  • need 60,000 cr.Rupees Investment.
  • Will open Railway University for both technical and non-technical subject
  • will tie up with technical institutions for introducing railway oriented subject for graduation and skill development.
  • Will educate children of Railway staff at remote locations through Railtel OFC (optical fibre cable) network.
  • Will provide summer internships for Engineer and MBA students
Agriculture & Railways Parcel biz
  • Special milk tanker trains will be introduced- with help of NDDB & Amul
  • Cold storages for fruits and vegetables at 10 locations
  • Separation of parcel business from passenger trains.
  • Dedicated Parcel trains and terminals.
  • Private investment allowed for procurement of parcel vans and rakes
  • will setup pickup centres to help e-commerce Companies (like flipkart).

E-governance /ICT initiatives

Announced in Modi railbudget 2014

  1. Paperless offices in Indian Railways in 5 years
  2. E-procurement mandatory for projects worth Rs.25 lakhs and above.
  3. Next Generation Ticket Reservation System
  4. Wi-fi Services in all selected stations and trains
  5. Mobile based Wakeup Call System, Destination Arrival Alerts for passengers.
  6. Computerized Station Navigation Information System;
  7. Computerized Parcel Management System

[Act 5] Economic Survey Fodder

F1: Challenges of Indian Railways

  1. Indian Railways carry only 31% of the total freight carried in the country by all modes. If more goods transported by railways- it’d reduce fuel consumption of Indian economy.
  2. Railway is expected to earn like a commercial enterprise and serve like a welfare organization. These two objectives never meet, because of poor operating ratio (94%).
  3. As a result, railways to compromise with efficiency, cleanliness and safety.
  4. In the name of social responsibility – past government setup lot of populist projects (like opening museums and hospitals).  But they hardly bring any revenue to the Railways.
  5. Proliferation of “projects” in past decades. To finish them, all we need 50,000 crore every year for next ten years.
  6. Additionally, we need >9 Lakh crore to complete the Golden Quadrilateral Network and ~60,000 crore for introducing one bullet train alone.
  7. Indian Railways is a business that has a monopoly that has nearly 125 crore customer base that has 100% sale on advance payment; but still starved of funds.
  8. Too many rail stoppages = trains slowed down, long distance travel time increased. Most of our “express” trains have become slow like “passenger” trains. (Reform: Modi railbudget has set deadline- 30th September 2014. After that all such stoppages will be reviewed and closed down if unnecessary.)

F2: FDI in Indian Railways

  • Rail ministry wants FDI in all sectors except Rail operations. Because they have hardly any surplus money to finance all the projects. Even PPP gathered ~3000 cr. in last two years. We need 50,000 crore investment every year.
  • Survey suggestion: While FDI and privatization can be big ticket reforms for railways. BUT Rail privatization proposal should be examined carefully. Because it succeeded in Japan but failed in UK.
Before Aug After Aug 2014 cabinet clearance
FDI was permitted only in mass rapid transit system. 100% in following areas:

  • high-speed train systems
  • Suburban corridors
  • dedicated freight line

FDI prohibited in: Train operations and safety.

F3: PPP/Infra/FDI (Rail budget 2014)

From Modi Rail budget 2014

  • 100% FDI in railway infrastructure, high speed rail system and dedicated freight corridor (FDI under automatic route)
  • Private investment permitted in station modernization, ware houses etc.
  • PPP under BOT (build-operate transfer route).
  • Will speed up construction of critical coal connectivity lines. This will help in faster movement of coal from mines to thermal power plants.
  • Will connect ports to hinterland via PPP. (especially minor ports on Western coast)

F4: Rail reforms in 2013

  1. Indian railways entered the one billion tonne club, joining the Chinese, Russian, and United States railways.
  2. Braille stickers in coaches to facilitate visually impaired passengers.
  3. FinMin=>Nirbhaya Fund=> Railmin=> alert system in trains for women safety
  4. Varansi’s Diesel Locomotive Works developed world’s first prototype 5500 HP diesel locomotive (WDG5). It can achieve 100 kmph speed.
  5. Established Joint venture Railway Energy Management Company (REMC)- for green energy initiatives. Windmills, solarplants to reduce energy bill of Railways.
  6. Established subsidiary company High Speed Rail Corporation of India (HSRC) to run passenger trains at speeds up to 350 km per hour. Studying Mumbai-Ahmedabad corridor feasibility with help of Japan.
  7. Focused on environment-friendly and economically efficient transport movement.
  8. Jammu Kashmir connectivity: (see following table)

Appendix: Stupid statistics

1.16 Lakh kilometers of track length
2.4 Lakh wagons
13.1 Lakh employees
23 Million passengers carried every day- same as moving entire Australia
7172 No. of railway stations
11563 Unmanned rail crossing
12617 No. of trains owned by Railways
30348 Total rail crossings
63870 Coaches
23 paisa loss per passenger per kilometer (2013)
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67 Comments on “[Infrastructure] Rail-Budget 2014, Tariff Authority, Biodiesel, Biotoilets, FDI & more”

  1. Wah ustad wah….

  2. What happen if 2 or more candidates gets exactly equal votes in general election?

  3. Tanx a lot sir …for this hard work…I want to say that after the 24 august please evaluate the up-pcs exam (3 August)



  6. Can anybody tell me, please what was govt’s final decision on UPSC CSAT paper -II?
    I heard that marks for English Comprehension will not be counted in merit. I don’t understand which English Comprehension section. Paper-II has two types of comprehensions, one with hindi translation and another without no translation.

    Also, there is no authentic circular or directions from Lord Curgen UPSC on this matter.

    Could anybody please clear the dust?

    Thanks in advance

  7. Mrunal guruji…I m facing problem qhile reading aptitude section..its confusing from article to start… for e.g. in stdw part..its nit arraged properly..so we hav to openn all and then decide which wil 1st and so on..
    Ao my request you to plz give us direction about from which article qe ahould start…
    Thank you very much guruji..

  8. thanx sir for taking so many efforts for us

  9. 3 questions:

    1) Do we have attempt english comprehension questions in CSAT paper 2.
    2) what kind of undertaking is required if signature of candidate does not apper in the admit card..is there some proforma…recommended language.
    3) is a wrong option is filled up in the omr sheet what is the best method to erase is without “injuring” the OMR sheet.

  10. nice…Mrunal. as usual you are always at best level

  11. Hi Mrunal, is it now final that 22 marks eng is not getting included in this yr paper or is it also to be decided for the next year prel after all party meeting? I am extremely confused on the same and no notification has yet been released from UPSC. Please help!

  12. Confusion of the day,
    Csat paper ll eng passage,,,,,,,

  13. A big thanks …sir.
    @ Sir please give info about the status of english comprehension in csat -2 ? Is there any announcement from upsc side.

  14. sir ji economic survey ke ilawa bhi paper m bhut kuch ata h or kuck bhi pdha diya kro ye survey kab tak chale ga

  15. economic survey ,yaar itna kase yaad hoga .mrunal sir plzz kuch history,polity,economics k regarding bhi kuch daal do,plz ab vo daal do jo exam me aane k chnaces bahut ho

  16. Sir thanks a lot.i was very confused about how to preparing for ias

  17. //Hindi: Bagh Eranda, Jangli Eranda, Safed Eranda
    Gujarati | Punjab = Jamal Gota.//

    Why discrimination against south india languages every where…;)…lol just kidding…but very nice compilation sir ji…then we were proud of mural paintings…now we are proud of mrunal writings…;)


  19. What is Karanjia?

  20. @Mrunal sir–in Laxmikanth its given dat railway budget was separated from general budget in 1921,, but here u mentioned it as 1924-25…..
    So,, plz rectify me if m wrong…..awaiting your reply..thank you..

  21. SIR railway budget was separated from general budget in 1921 on the based of Acworth committee.
    source M Laxmikant, chapter parliament> budget section

  22. thank you sir

  23. this is ultimate information about railways. i think this is not only , you always provide rocking information to the aspirants. best wishes. i am also fan of ur site and i like this site as a celebrity education website.

  24. 1676 mm means 5 ft 6 inches :P

  25. On April 16, 1853 at 3:35 pm, the first passenger train of the Great Indian Peninsula Railway left Boree Bunder station in Bombay (present day Mumbai) for Tannah (present day Thane) The train took fifty-seven minutes to reach Tannah. It covered a distance of 21 miles (33.8 km).

  26. sir your L7P2 lecture is missing on YouTube. please upload as soon as possible. please sir its a humble request…

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