The Hindu : Opinion / Editorials : CONGENIAL BUT LACKLUSTRE

Online edition of India's National Newspaper
Monday, Feb 28, 2005

Opinion

Opinion - Editorials

CONGENIAL BUT LACKLUSTRE

IN KEEPING WITH his commitment, Railway Minister Lalu Prasad has presented a second successive Railway budget without any increase in passenger fares or freight. The 13 million passengers who use the train each day will no doubt thank him for sparing them; so will most sectors of industry. Despite the no-rate-increase norm, the Indian Railways may have even improved their operations and financial performance. But Mr. Prasad could have made much more of a congenial opportunity to give a clear direction and vision to the Railways. In 2004, he did not have the time to provide the much-needed focus since the United Progressive Alliance Government assumed power only in May. So he was content to thank the electorate and let the passengers off the hook. This time he has less reason to present a lacklustre budget. The silver lining in the exercise is a picture of enhanced efficiency of the system and improving operating ratios. The general buoyancy in the economy appears to have provided the steam for the Indian Railways to chug along, surpassing both freight and passenger traffic targets. What is new in this budget is the move to infuse competition in the handling of container traffic — the monopoly of the Container Corporation of India (Concor) will come to an end but the path ahead has not been clearly laid out.

The annual plan outlay of the Railways for the coming year has been pegged at Rs.11,827 crore with an additional Rs.3,522 crore from the Special Railway Safety Fund, to provide for a comfortable Rs.15,349 crore framework for the year. There was significant progress last year in the special safety drive, with a good performance in track renewals. This momentum has to be maintained so that the safety record of the Indian Railways can improve. The same cannot be said of the rolling stock, especially wagons, where demand far outstrips supply. Only a feeble attempt has been made to address this crisis, which threatens to hurt exporters. Considering that 62 paise of every rupee earned by the Railways come from freight traffic, the investment in this sector must grow substantially so that both trade and industry have a real incentive to use this service. The Railways have to bear in mind the growing competition from the road sector for short distance passengers and freight, and from the airlines for medium and long-distance passengers who are being wooed with throwaway fares.

The Railway Minister has generously offered concessions in train travel to farmers, rural students, and those attending interviews for State Government jobs. In an effort to please more States and political parties, he has announced 43 new trains and extensions for over two dozen others, trying to please more States and political parties. The Railways must realise that unless train movement can be streamlined, the system will get clogged, with passenger trains cutting into the operations of freight specials. Mr. Prasad has also announced a 0.5 percentage point reduction in the dividend pay-out to the Central exchequer but an enhancement of the share to the Depreciation Reserve Fund. The setting up of a Railway Land Development Authority is a progressive move, but it remains to be seen how the vast expanse of Railway land in the country will be developed. The Indian Railways, a financial behemoth, introduced a separate budget in 1929 following the Acworth committee report that found their outlay larger than the general budget. But now, given the scale of operations of corporate giants, a separate railway budget may not be able to justify itself much longer. The time may have arrived for examining why, for budget-making purposes, the Railways should not be treated on a par with public sector giants such as Indian Oil and the Oil and Natural Gas Corporation.

Printer friendly page
Send this article to Friends by E-Mail

Opinion

News Update

Stories in this Section

UPA SCORES OWN GOALS

CONGENIAL BUT LACKLUSTRE

Putin stands firm

Transition in Togo

Will Chidambaram win and retain friends?