"Railways facilities have not improved substantially for the past few decades which is the result of under-investment that affects capacity, leading to poor morale. This fed into vicious cycle of chronic under-investment for a long time," Railway Minister Prabhu said.

MUST READ: Read full coverage on 2015-16 Rail Budget

He said safety, quality of service, standards and efficiency all suffered due to poor financial resources available with the Indian Railways, which further fed into the vicious cycle of poor investment.

READ MORE: No hike in fare, says Suresh Prabhu

"This must be put to an end," he said, adding: "We have to make Indian Railways a benchmark organisation in safety, security and infrastructure."

People watching Union Rail Budget 2015-16 on television sets in Amritsar on Thursday

Earlier he presented a white paper on Indian Railways, which he said will form a trilogy of what plans he had in mind for one of the largest such networks in the world along with his budget for 2015-16 and a Vision 2013 document to be presented later in the year.

Addressing the pressing issue of finances for the Indian Railways, Minister Suresh Prabhu on Thursday proposed an operating  ratio below 90 percent to increase revenues for the system.

The railways' operating ratio, that has been consistently above 90 percent for the past five years, suggests how much money is spent on day-to-day operations to earn the revenues, giving an indication of the funds left for safety and expansion.

MUST READ: Prabhu proposes lowest operating ratio for Railways in 9 years

"I have proposed an operating ratio at 88.5 percent -- as against the targeted ratio of 92.5 percent for 2014-15, which has improved to 91.8 percent," Prabhu said presenting the Railway Budget for 2015-16 in the Lok Sabha.

A security official stands guard over bags of documents related to the Railways Budget outside Parliament House in New Delhi

"This (proposed) operating ratio will be the best in nine years," he said.

While a ratio of 93 percent means it saves just 7 paise on every 1 rupee it earns from operations, the latest rail budget comes at a time when its finances and efficiency are, perhaps, at their worst.

Globally, a figure of 75-80 percent or lower is what is seen as a healthy benchmark, but India ranks among the worst networks on this count.

Prabhu has said the railways need USD 100 billion or Rs.6 lakh crore in funding over the next 3-4 years.

Rail Budget: History at a glance

Without tinkering with passenger fares, Minister Suresh Prabhu presented his maiden budget for Indian Railways in the Lok Sabha on Thursday, promising to balance passenger needs and long-term interests of the organisation and benchmark it globally on quality, safety and reach.

Porters listen to Railway Minister Suresh Prabhu's budget speech on a radio set in Moradabad on Thursday

"There will be no hike in railway passenger fares. We will focus on improving passenger amenities including cleanliness," Railway Minister Prabhu said.

"Railways facilities have not improved substantially for the past few decades which is the result of under-investment that affects capacity, leading to poor morale. This fed into vicious cycle of chronic under-investment for a long time," he said.

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