Arun Jaitley backs outsourcing of non-core functions of railways

Government had in September scrapped 92-year old practice of presenting a separate railway budget

Weeks before he presents India's first combined general and railway budget, Finance Minister Arun Jaitley today made a strong case for outsourcing of non-core functions like hospitality services of Indian Railways and pressed for a transparent accounting system.

He said that unless the railways strengthen its performance and internal management system, they will lose out to competition from other sectors like highways and airlines in both passenger and cargo transportation.

"The core competence of railways is really to drive trains, to provide those services. Hospitality may not be the core competence of the railways and therefore, what is not within its core competence, the principle of outsourcing -- which is accepted world over -- can be a logical addition to those activities of railways," Jaitley said.

As Railways plan to shift towards accrual system of accounting from cash system, Jaitley said the accounting reform will better reflect performance.

"Your accounting systems really must reveal more instead of concealing the reality. What is the kind of investment in infrastructure that is coming in, what is the kind of investment in railway safety, what is the kind of outcome of outlay that you have planned, I think those accounts must really reflect the reality," he said.

The government had in September scrapped the 92-year old practice of presenting a separate railway budget and decided to present a combined general and railway budget for 2017-18 on February 1, 2017.

Speaking at a conference on Accounting Reforms in Railways organised by CII, Jaitley said that year after year, the governments have indulged in populism and people listened to Rail budget only to hear the number of new trains being announced.

"I'm glad that over the last two years, railways have resisted the temptation of going off-track and falling back to the same level of search of populism over performance and is concentrating on improving its quality," he said.