A Budget that reveals less and conceals more

COMMENT/ R Sivadasan,Former Financial Commissioner, Indian Railways

This disturbing Budget reveals less and conceals more. After three excellent Railway Budgets — one last year and two in her previous tenure — it appears that this well meaning railway minister has been taken for a ride by her team, by crafting a deceptive budget, unlike any other in the past.

First, it tells there is no fare revision but it does just the opposite by cleverly planting a pre-budget announcement in the media that the railways propose to add 12 AC III coaches in all 24-coach trains. In effect, they replace an equal number of low-fare second-class sleeper coaches with higher fare AC III coaches, forcing economically vulnerable sleeper-coach passengers to pay higher fares. If 100 pairs of mail or express trains out of 400 are brought within the ambit of this changeover, the railways will stand to garner more than Rs 1,000 crore. If fares are to be raised, let us be honest. Freight rates are also not immune to these wily ways. In actual effect, the shuffling of freight classification and flexi-tariff operations continue under the banner of ‘no tariff increase’, as perfected during Lalu Prasad’s regime. Freight rates hikes through the backdoor range from 3 per cent to 8 per cent, during 2009-10, without sparing even farmers’ fertilizers and foodgrains for below poverty line families, both of which are actually subsidised by the finance ministry. In 2010-11, too, there is a cushion of more than Rs 200 crore built in the earnings/million tonne.

Contribution to the Depreciation Reserve Fund stands reduced to Rs 4,500 crore in 2009-10 and Rs 7,600 crore in 2010-11. This is an accounting manipulation to polish up operating ratio and net revenue.