Rail Budget
New Delhi, 27 February 2015
Depoliticized Budget
Indian Railways On New Track
By Shivaji Sarkar
It is unusual to have a Railway
Budget without its politics, populism, regional angularities. Railway Minister
Suresh Prabhu seems to have made an effort at professionalizing the country’s
biggest commercial lifeline that has been gasping for over two decades.
Surprisingly enough he has stressed to improve points which affect travellers daily.
No introduction of a new train is
another seemingly sanguine decision. It hints at his bid for improving
management of the existing trains, particularly the slow poor man’s trains like
Janata Express. These are the most important ones. When these do not run on
schedule, all other so- called superfast and VIP trains are crowded.
The slow ones connect villages and
hinterlands, which do not still have a transportation system or even a
rudimentary road. If Prabhu can revive those trains, which once were most sought
after, he would do a great service to the nation for de-crowding the trains and
bringing back a semblance of efficiency, that once railways was known for. Let
us at least believe his assertion in Parliament that he would lean more on
improvement of existing system as it is “cheaper, cost effective and easier to
do than having a new set of baggage”.
He has been praised for not
increasing fares. That is partially correct. Last June, his predecessor
Sadanand Gowda had increased 14.2 per cent fare and 6.5 per cent freight netting
Rs 8000 crore, despite the admission of Railway Board Chairman that in reality
the railways were not in losses “but had the fare and freight not been hiked it
could have been in losses”. This was because of petroleum price hike and a part
of the fuel adjustment component (FAC). Prabhu had the option to give it back
to the people as he has saved over Rs 2000 crore because of fall in fuel
prices.
He is being criticized for
rationalization of freight leading to 10 per cent hike in the movement of food
grain, fertilizer, steel and some other products. In fact, he need not have
brought it in his budgetary process. Since the time of Former Railway Minister
Laloo Yadav, freight is on an automatic system called “dynamic structure”. It
ensures virtually continuous “revision” – rise - of freight all through the
year. Freight has virtually been taken out of the budgetary purview and the
minister has little to do with it. It has led to diversion of goods traffic to
the road sector too.
Now those who are heaving a sigh of
relief for not increasing fare need to read the fine print. Prabhu said he
would set up a “regulator”, for monitoring his works as well as the kind of
fare he would be charging. This is a broad hint. Fare may take an upward trend.
Prabhu needs Rs 8.5 lakh crore
during the next five years to revamp the railways. His White Paper explains the
problems and indicates the five-year road map of leading to world class travel. He wants to raise a substantial part from
internal resources. A “dynamic fare” could keep his kitty growing.
Those who today said he has put the
people before populism might change tack. But they would also have to realize
that at least he has suggested better ways to raise the finances. Plan outlay
has been raised to Rs 100,011 crore, a whopping never before 52 per cent
increase for infrastructure building. It shows the concern of Prime Minister
Narendra Modi and Finance Minister Arun Jaitley as well, who consented to
extend such finances. The
Plan outlay would be financed through internal resources and Rs 5781 crore
through public-private-participation (PPP).
The NDA Government also assured Rs 40,000
crore for the railway’s annual budget, almost Rs 9000 crore more than last
year. Besides, Prabhu gets Rs 1645.60 crore provided as diesel cess from Central
road fund. One part of finances would come from market borrowings of Rs 17655
crore, an increase of Rs 5609 crore from the last budget about 46.5 per cent. There
would be a cost for multi-dimensional “swachh
rail, swachh bharat”. It is being assessed.
To keep fiscal deficit low, and help the Finance
Minister, railways would now borrow from multilateral and institutional financiers.
A major part for his five-year vision would come from the World Bank, Asian
Development Bank and International Finance Corporation apart from other
agencies. They provide developmental assistance at nominal interest. The NDA Government
has allowed railways to have direct funding and manage it. Else the government
would have to raise borrowings. It would reduce many bureaucratic steps and
also make railways utilise borrowings in a more sanguine manner. This happens
less with easy budgetary support.
The task ahead is not easy. Prabhu has to
fund for the hi-speed bullet-like train sets on existing tracks. The trains
would run without a locomotive engine. The real bullet train is also his
concern. It would cost Rs 60,000 crore, almost Rs 650 crore for initial steps
to fulfill Modi’s vision. The track is slippery.
Prabhu should be wise. Instead of Indian
Railways (IR) taking up the bullet train, it should set up a separate body to
build track, operate and finance. Railways should only be a consultant and
charge fees from it. This would make Prabhu’s jobs for the common man easier.
He has to come out with a wider vision for the
North-East. It would require Rs 5225 crore to connect regional capitals - a
pious mission. There are some other States and hill States like Uttarakhand and
Himachal Pradesh, which also want similar projects. Prabhu needs to give a
thought. Either he can have separate bodies or can consider allowing States to
set up their own railways. The IR could be consultant or operating partners.
This could make his behemoth financially sound and managerially efficient.
These are not new ideas. The Konkan and Metro rails are living instances of
such entities.
If Prabhu does not do it, his major
corridor mission, doubling tripling and quadrupling of busy tracks may once
again bump into problems. He has apparently done a workable proposition of
taking PSUs like Oil India,
GAIL, SAIL and Coal India
on board for making them agree to invest in his new tracks. The mission to
allow trains in the name of companies though may bring him money but it defaces
trains by covering with company posters, as the Delhi Metro. Public property
should better not have such moving hoardings.
To sum it, the rail budget has a road map.
If Prabhu can tread on it, one can expect a cleaner, faster, less crowded
system. If it succeeds it may begin a new culture. ---INFA
(Copyright,
India News & Feature Alliance)
|