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| Vision 2020 or 2011? | | Ms Banerjee's politics, populism and PPP plans |
| Business Standard / New Delhi Feb 25, 2010, 00:58 IST |
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In China the railway system becomes bigger every year, in India railway ministers’ speeches become longer by the year! But pardon Ms Mamata Banerjee, the minister for railways, for having an eye on next year’s elections in West Bengal. If she defeats the Left Front, she could contribute more to India’s economic development than she hopes to with her plans for the Indian Railways. If Ms Banerjee is judged harshly for the poor performance of the railways this current fiscal, and for all the predictable populism of her budgetary proposals, it is because she has raised expectations by publishing her Vision 2020 for the Indian Railways. The sharp variance between the revised estimates of expenditure and the Budget estimates of seven months ago suggests that Ms Banerjee has been thinking too much about the long term and not enough about the here and now. Neither freight nor passenger rates have been touched. The latter, in particular, have been crying out for action as, going by the railways organisation’s own status report, loss on account of passenger traffic touched a massive Rs 14,000 crore in 2008-09. The bill for the pay commission’s award was not an unknown at that time. The operating ratio (the extent to which earnings are taken up by expenses) has fallen by over two percentage points to an abysmal 94.7 per cent. If this is the ability of the railways setup to gauge what is less than a year ahead, there is little reason to believe that the over two percentage points improvement projected in the Budget for the coming year (2010-11) has a decent chance of being achieved.
In the action taken part of the Budget speech, she has taken credit for introducing most of the new trains which had been announced in the previous Budget. And the latest one has added its share of promised new trains. It is well known that the railways are stretched to capacity; in fact, the organisation has been lauded for achieving increasingly higher levels of capacity utilisation. New lines, locomotives or coaches cannot be added in a jiffy. Under the circumstances, the ability to move goods traffic faster is bound to be impaired. The railways' proposals for public-private-partnership (PPP) must, of course, be commended. But the railways’ share of new investment in PPP projects has to come from somewhere. If the land or the rooftop rights of the railways are an asset, as indeed they are, then the duty of the railways is to get the maximum buck out of them, not make them available for hospitals and educational institutions. The speech promises 552 hospitals and diagnostic centres, and then carries an unending list. It also lists 114 socially desirable new lines whose surveys will be updated. This is not to be confused with proposed new surveys for new lines (hopefully not socially undesirable), which are also listed. Ms Banerjee has promised a separate structure for business models so that operations and management are not disturbed. This is easier said than done in a habit-bound organisation like the railways. Ms Banerjee need not be doubted in her desire to give the railways a great new future. But what everyone would like to know is if she can deliver. This will also influence the thinking of the voter in Bengal!
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