The railway Budget for the rest of the current year is marked by monumental drift. Not even a little finger has been raised to begin to set things right. | |
The only saving grace is that no major new damage has been done. The drift lies in not raising passenger fares and the absence of any serious measures to control costs. The relief lies in the fact that freight rates have been spared a hike.
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In the last few years the railways had made halting efforts to cut and rationalise freight rates in an attempt to claw back from road transport lost market share. These measures had yielded some results.
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Most unfortunately, this process has been halted. It looks as if the best that Manmohan Singh could do was to dissuade Lalu Prasad from commiting any major sin of commission and confine him to well known sins of omission. The road to healthy growth for the railways does not lie along this path, but right now the political system seems unable to deliver anything better.
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The status quo is best illustrated by the fact that the operating ratio, which indicates how much of earnings is taken up by operating expenses, is slated to remain at the same 2003-04 level of 92.6 per cent level in the current year.
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As no effort has been made to mobilise fresh revenues, this projection will hold only if the present economic buoyancy continues. The interim Budget of January had projected a growth of 4.4 per cent in gross revenues, based on existing rates. The Budget proper now projects revenue to go up by 5.4 per cent without any hike in rates except a meagre Rs 50 crore more from parcels.
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The interim Budget projected expenditure to go up over the previous year by 6.4 per cent, whereas the present Budget brings down the figure to 6.1 per cent. It is not clear why this should happen.
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Similarly, why should the allocation to the pension fund be reduced by Rs 100 crore between January and July, unless it is to somehow show a better net receipts position? It is perhaps pointless to seek too much logic in the financial projections made by the railways. In the past these have changed with change of the railway minister.
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The Budget continues with several negative traditions. New passenger trains will be introduced, leaving even less space for freight traffic. Political compulsions are clearly evident in a good number of these trains serving the south, whose support is crucial for this government.
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The Plan allocation has been marginally raised, with as much as 20 per cent of it coming from the special railway safety fund. This will presumably take care of investment in new technology to enhance safety. But what about routine maintenance to ensure safety?
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The appropriation to the depreciation reserve fund, which finances track renewal, is fixed at the same level as last year. If steel prices have gone up drastically then rail tracks will cost more; doesn't that need higher allocation?
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Anyone who uses the railway system knows full well that the system is creaking, and desperately needs more investment. Budgets, especially with speeches that are as long as the railway minister's, should be expected to provide for such investment. That this one has not, is a pity.
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