RailEnquiry

The time has come for the railway budget to be subsumed by the Union budget. After all, why is it so important to make a spectacle and tell lies while presenting it? Over the last several years, the railway budget has become an instrumentality of populism with large dollops of sops to appease a wide array of constituencies thrown in.Between Bihar and West Bengal, the railway budget was akin to a train hijacked by allies to fulfil prophecies. And guess what, the majority of these sops have never seen the light of day. From Nitish to Laloo to Mamta, and before them Paswan, the rail budget became a theatre of the surreal and absurd with reality and disbelief suspended indefinitely.The 2012 railway budget, which scalped the then minister Dinesh Trivedi, had a plan outlay of Rs.60,000 crore and a revenue projection of Rs.135,000 crore. Add the bit about the new minister, Pawan Kumar Bansal, saying on Friday that the Railways require Rs.147,000 crore to complete pending projects.He also said that the Railways have failed to manage funds for their long list of pending projects. And this perhaps is the fundamental flaw in the operations of the Indian Railways — a gargantuan mismatch between revenues and expenditure. All told, there are 347 pending projects of the Railways and to plug this massive gap, as much as Rs.147,187 crore is required. Woe betide, as Bansal actually said that in the past, the Railways could only muster Rs.5,000 crore annually for rolling out these projects.

Grandiose schemes announced with great panache from the pulpit of parliament have only burdened the bleeding Railways further. Its catchline — Bharatiya Rail, aapki sampati — has been taken too seriously by one and all. The end user is guilty of using and abusing it, and more than that, every single MP is making irrational demands on what is now a wobbly mother ship.

So, don’t believe a word if you hear that Laloo economics turned it around by leaving behind a treasure trove of surpluses. Not for one moment, for the Railways are broke. Its humongous wage bill is breaking its back monthly. Fiftyfour per cent of its expenses goes towards paying its staff.

In many ways, the Railways are a national catastrophe which we want to remain oblivious about. Unable to deal with the market reality of aligning passenger fares, and in the process tweaking freight rates consistently to make railway freight unattractive, a catalogue of policy measures by successive government have left its finances depressed.

As a result of continual rate hikes, railway freight is finding its market share eroding as it becomes uncompetitive compared with truck freight. Railway freight now has only a 30 per cent market share in India. Forget modernising the Railways, it is a struggle to keep it going in its present avatar as the business model isn’t up to speed.

Just desserts for this absurdity came a couple of years ago when good old Sachin Tendulkar blew this theatre of the railway minister giving a bhashan on railway budget day out of the water by scoring a double hundred in an ODI, rendering the event hors de combat. With the principals in the coalition abdicating authority and giving in to the demands of bullying allies, pure economic logic was tossed out of the window.

Administratively, the Railways, one of the largest employers in the world, must have a minister but they don’t necessarily require a separate budget. After all, the outlay comes from the Consolidated Fund of India, a.k.a. Black Hole.

Click here to Enlarge Does defence for instance stand up and have a budget of its own? And I guess its importance to the nation is not lost on anyone. Ghulam Nabi Azad called it right when he asked the Congress top brass to reclaim its lost legacy and equally the runaway train to populism. It employs a staggering 1.36 million people and has a vast army of pensioners too that it needs to feed (their number is reportedly in the vicinity of 1.2 million).

And the hiring doesn’t stop. In 2011-12, the Railways hired 80,000 people; in the present financial year, they will hire another 100,000. Yes, they provide public service of a kind one cannot visualise in the mind’s eye, but that doesn’t mean all economic paradigms should be flushed down the toilet. The idea should be to marry public service with efficiency and profitability. One the greatest frauds perpetrated on the Indian mind was the ‘surplus’ generated by Laloo Prasad Yadav during his tenure as railway minister. One wonders how the treasury was empty by the time UPA-II came along.

The creaking Railways, where an accident is waiting to happen anywhere, anytime, have chosen to disregard safety and rationality for crass populism. Why is it that the defence minister, who has an outlay in excess of Rs.186,000 crore, thrice the size of Railways, does not get to make a budget speech? His budget is three times the size of the populist railway budget.

Now, to come back to Dinesh Trivedi, who argued vehemently for a hike in passenger fares because he sincerely believed that creaking infrastructure needing upgradation. He met a rather quick end, consigned as he was to the nearest rubbish heap for uttering sacrilege. Trivedi spoke the truth but to no avail.

The UPA is in a mood these days to do the unthinkable. It has shown aggressive intent lately — rightly or wrongly is a matter of debate and conjecture. It does seem to want to change things around as gets into poll mode. It will be a great service to the nation if the whirligig of presenting a railway budget is dispensed with and the Union Finance Bill factors in the requirements of the Indian Railways.

Finance Minister P. Chidambaram may rise to present the Union Budget that looks at the Railways as one of its charters and components. More than that, we will also get to know the truth about the finances of the Railways. Do the mythical surpluses actually exist? A capital starved Railways require a major rebooting exercise.