A half-populist Railway Budget in the election year is the testimony to the survival crisis the Indian Railways is facing. Passenger fares were hiked by the back-door measures and many senseless but populist projects and plans (many of them unachievable) were announced. But the locomotive giant needs immediate and direct measures to become self-sustaining.
Yes, the priority at the moment is to become self-sustainable. Modernization has no scope for now.
Indian Railways is bleeding. It has not been able to do much after the British left the India. It could not gain much in terms of operational and commercial efficiency even in the heydays of the Indian Economy post-1991 that more than quadrupled the size of the Indian Economy.
Its story has been akin to the common man, the ‘aam aadmi’, a compromised and neglected entity in the making of the Indian Democracy – who has been subjected to a sluggish growth rate midst the chaos and chorus of the high-voltage growth of the Indian Economy.
And it is all due to the present political culture.
The ill-health of the Indian Railways is due to the political administration it has had. The biggest landowner of the country was forced to bleed by a decade of almost no passenger or freight rate hike. And the reasons were purely political, not social or economical, the ailing finances of the Indian Railways expose.
The fuel and energy prices have increased manifold in the same time-period. Then there are huge operational expenses incurred in maintaining such a behemoth that is the world’s seventh largest employer and certainly the largest in the country. Add to it the increasing pressure of extending the network and introducing modern facilities like high-speed trains and ramp-up of technology, from operational to commercial.
All this demands a healthy financial performance with consistent revenue generation and cash inflows. The Indian Railways has not been allowed this by its political administrators.
It has been manipulated by the politicians to work as an agency to draw electoral mileage. Nothing has been done to increase or strengthen the network but irrelevant new trains are announced in every Railway Budget. No feasibility studies are conducted before starting a new service. The only consideration is to give more and more goodies to the states belonging to ruling political party or the Railways Minister in case of a ruling coalition.
Fares have been consistently held up for political reasons to serve the political interests. The high share of the freight used to balance the loss here. But with changing times and better road infrastructure, the Indian Railways has lost that balancing edge. From controlling 80 per cent of the freight transportation once, it has come to a dismal 20 per cent of freight share now.
At the same time, the global fuel prices have increased manifold post-2000 putting the pressure on the government (which has always sought to wash its hands off) in absorbing and subsidizing the fuel and energy expenditure owing to the passenger transportation of the Indian Railways.
It has become imperative now (there is no option left) to link the rail fares with the deregulated fuel and varying energy prices. If, we as consumers, need to use the services, almost of us can pay easily. After all, no one travels by the train every other day.
The fuel prices deregulation, though insensitive, politically motivated and socially unacceptable, has been put into effect. So, we as passengers need to accept that. So, we as consumers need to accept the deregulated freight rates.
There is nothing wrong in charging rightfully for the services being provided, and the Indian Railways, anyways, is not at all a costly affair given its range of the different price-pointers.
But why not treat it rightfully then? Why not run it as an efficient outfit in the service of the nation? Why let it bleed by arresting its sources of income for a decade for silly political considerations?
Why make political differences between passenger fares and freight rates when it has to be a decision of economic wisdom and practical requirement?
Why play the game of perceptions for silly political gains?
Yes, it is all due to the present political culture. And this Railways Minister and the Railway Budget was no different either.
Mr. Bansal, like every other rail minister, burdened an already overcrowded rail network with 94 more trains. Already, the Indian Railways are notorious to run with horrible delays. To add to the misery, there were countless projects, plans and plants and concepts, certainly not achievable in the near future. They will follow the long list of delayed or just-on-paper rail projects.
It doesn’t need a Harvard economist to realize what the Indian Railways needs. It needs complete electrification. It needs doubling of lines across the whole network. It needs engines to ferry trains with greater numbers of coaches and not more trains. It needs a rationalize fare structure. It needs a proper land-management policy to commercially explore its land bank, largest in the country.
It needs a common rational thinking to begin with the process of much delayed Indian Railways reforms.
©/IPR: Santosh Chaubey
Featured Image Courtesy: Ministry of Railways Website