The targets for the coming year in the rail budget do seem to be reflecting the slowdown. In the budgets, I have observed that ministries understate their budgets normally.
The targets for the coming year in the rail budget do seem to be reflecting the slowdown. In the budgets, I have observed that ministries understate their budgets normally, because if you don’t achieve your targets, the finance ministry questions your performance. You compare it with previous years, it may seem like a marginal increase; but in reality, it may actually go higher. Therefore, I wouldn’t be surprised if the projected freight loading exceeds the estimated 882 MT and touches 900 MT.
This time the rail budget seems to have highlighted the more human face, as against the previous minister Lalu Prasad who was more focused on the economic side of the budget, in terms of what is more profitable to the railways, as over the past few years.
My one concern is the monthly ticket for Rs25 within 100 km, for ‘poor people’. It has not been defined which 100 km. The revenue is not the concern here as the second-class unreserved revenue accounts for very little of the overall revenue. But how will they identify who can avail these facilities and how. Implementing these populist measures is going to be a challenge and whether the railways have the resources to do it.
I like the emphasis on security at all railway stations. Moreover, the focus to develop railway stations is also a good move. The stations are a good investment and to create them as assets for the railways is significant. They are an important point with substantial consumer interaction points. This will give employment benefits to people, again a good populist move. I had proposed to change the incumbent open toilets of the railways in one of my papers, which was considered by the previous ministry. This minister too reiterated that commitment, so that is a heartening development. The idea is to retrofit all toilets, make the disposal air-based, which will greatly reduce water wastage.
I have a concern when this ministry wants to focus on social viability and not only economic viability. For a very long time, the railways had been caught up between social and economic policies. And, in fact, for a very long time, they had been passing the buck saying they had to be both commercial and social — a kind of schizophrenic approach. In last tenure, focus on economic viability was coming out far more sharply.
Personally I feel as long as economic viability is not substituted with social viability, it should be fine. I am not saying that social viability should not be considered, but economic viability should get due importance, should not be undermined.
As for the 50 new non-stop trains, I believe the concern is that we need much more advanced signal controlling. The proposal will generate capacity. Of course the concept is not new. Earlier there was the Sampark Kranti Express, introduced by Nitish Kumar.
It was from Delhi to various states, and it would go non-stop up to that state. If more and more get specific bookings for the destinations that they serve, then they can afford to run on the fast track. The growth of revenue will be higher than that of cost, unless of course there is an overwhelming recession which brings everything down. But in India, infrastructure is a growth sector. Areas like steel and cement are underplayed; there will be growth in all these areas.
G Raghuram is the Indian Railways chair and professor of rail transport and infra mgmt at IIM-A.
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