Rail Budget: Tall claims, but short on substantial efforts
G. Srinivasan New Delhi, Feb 13 For a politician introducing the Railway Budget for 2009-10, as the speech in Mr Lalu Prasad puts it, the entire exercise is cleverly packaged to tom-tom the scorecards of his stewardship in the Railway Ministry for the last five years. With panache for drawing the attention of listeners and onlookers, Mr Lalu seldom fails and his reading of the vote-on-account statement in the Lok Sabha was long on tall claims and short on substantial efforts to stem the rot of the transport behemoth suffers from. As the economy grinds to a slowdown noticeable from October 2008 which impacted the loading and freight earnings in October and November, Mr Lalu's claim that the situation showed some improvement in the next two months and "we are not only hopeful but confident that the budget targets for passenger and goods earnings set for this fiscal will be surpassed" appears to be an adroit gambit that might not pay off. His litany of largesse includes announcement of new lines, gauge conversion, doubling, introduction of new trains, extension of trains and increase in frequency of extant trains. There are also reports of cut in passenger fares of ordinary passenger trains by one rupee for fares costing up to Rs 50/passenger for journey above 10 km, across-the-board cut by two per cent for tickets costing Rs 50 and more for a passenger in second class and sleeper class fare of all mail/express and ordinary passenger trains and a cut by two per cent on fares of AC First Class, AC II tier, AC III tier and AC Chair Car, all calculated to drain the system of a massive Rs 700 crore in a full year, if implemented from the next fiscal. safety surcharge The fourth successive cuts in passenger fares today need to be viewed against the criticism of the House Panel on Railways which had found the Railways guilty of having subsumed the safety surcharge in the passenger tariff for part-funding the Dedicated Freight Corridor and other infrastructure projects and urged the Railways to review the move to replace the safety surcharge with development charge. The Rail Ministry's blithe response that the reason for subsuming the safety surcharge in the passenger tariff is due to the fact that despite increase in input costs and operating in high cost economy, there has been no increase in passenger fares since 2002-03. The Railways could tell the House Panel that instead of effecting increase in passenger fares it has been reducing the fares in the last successive Railway budgets. If that were so, why the Minister has scant concern for the finances of the system but brag about unveiling futuristic scenario of putting the Indian Railways on a modern track? Freight costs As it is, passenger fares were cross-subsidised by the freight rate with the latter being patterned after a dynamic model of pricing - of first offering discount and then hiking the charges once the offtake of commodities through rail system picks up! This way, the industry suffers as its cost calculations go awry whenever the Railways tampers with the freight charges. The loss borne by the Railways in running suburban services every year is another Rs 900 crore which also gets sucked up in the black hole of freight earnings revenue. With an existing employee scroll of 14 lakh and 11 lakh pensioners, the total wage bill of staff in 2007-08 (excluding pensionary benefits) totalled Rs 18,565 crore or 45 per cent of ordinary working expenses (excluding appropriation to Depreciation Reserve Fund and Pension Fund) and fuel cost accounted for close to 30 per cent and other materials and services another 25 per cent. With costs and expenses pre-empting so dominantly, what is the system left with for maintenance of rolling stocks, modernisation or track renewals to keep the wheel of the system running without bump or blip is an open secret. Yet, the Railway Minister, hailing from the rural and backward State of Bihar, with no known managerial efficiency or running a complex transport network such as the Indian Railways, is being lionised for turning around the system into a viable operation by effecting "a paradigm shift" in running the world's largest arterial mode of transport. At the end of the day, the system continues to be dogged by lack of functional autonomy at zonal level or board level with the whims and caprices of political leadership largely determining the priorities or lack of them, even though several initiatives such as privatisation of peripheral activities or commercialisation of non-core areas even on a modest level continue to be on the backburner. http://www.thehindubusinessline.com/2009/02/14/stories/2009021451831500.htm --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. 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