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Impressive performance again

Lalu Prasad has maintained his streak of success as Railway Minister. The budget for 2009-10 he presented to Parliament on Friday — the sixth by him — though an interim one in view of the forthcoming general election, stuck to the success formula he had hit upon. True to style, he announced a two per cent cut in passenger fares — second class, air-conditioned, and first class — and left the freight rates untouched. It however remains to be seen whet her he will be persuaded to revisit the freight tariff because of the perceived sluggishness in traffic. The Railways has managed to turn in an impressive performance generating a cash surplus of Rs.19,320 crore (before tax) for 2008-09, despite the adverse impact of economic slowdown and decline in industrial growth; the total surplus gained over the past five years is Rs.90,000 crore. This reinforces the internationally acclaimed turnaround Mr. Lalu Prasad has brought about during his tenure. Predictably, the budget had its own liberal quota of proposals for new trains, new lines, gauge conversion, and doubling of track. Capping them all was the proposal to conduct a pre-feasibility study for running a bullet train between New Delhi and Patna. The Minister also promised to look at the feasibility of launching bullet trains on six other routes.

On the finances front, the Railway Minister has two things to worry about. The first flows from the negative impact of economic slowdown on freight loading, while the second relates to the implementation of the Sixth Pay Commission report — the additional outgo by way of higher salaries and pensions is placed at Rs.13,500 crore. Mr. Lalu Prasad put the freight loading so far this year at 794 million tonnes but there was no commitment to achieving the annual target of 850 mt. The biggest concern however has to do with the reverse turn the operating ratio has taken. After battling hard for four years to bring the figure to a healthy 76 per cent, the Railways has let it slip to 88 per cent, and there is a real threat of its edging close to 90 per cent next year. The challenge ahead is to improve the operating ratio, keep the cash register ticking, and give a vigorous push to the ongoing modernisation and safety drive. For now however Mr. Lalu Prasad has reason to celebrate the Railways’ remarkable performance under his watch.

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