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'Freight corridor project is making no progress'

Sitaram Yechury 

The railway minister was eloquent in his definition of the railways, but the health of his ministry is disturbing. The Rail Budget was always kept separate from the General Budget because the sector was a huge earner of revenue. Now, it’s the other way round. Instead of internal resource augmentation, it relies on budgetary allocations.

How can the ministry contemplate new schemes when the minister himself had pointed out that Rs 1 lakh crore was required to complete pending projects? A plethora of promises made in one year is forgotten the next year.

The recommendations by the Sam Pitroda committee favoured privatisation of the railways. British railways were privatised and re-nationalised within a few years, as privatisation did not work.

The path being undertaken by the railways is a recipe for disaster. It is ridiculous that global tenders would be floated for catering services, which would attract multi-national companies such as McDonalds at the cost of Indian caterers.

We also strongly protest the across-the-board increase in passenger fares announced in the Railway Budget, along with the increase in freight charges for most commodities such as coal, fertilizers, food grains, steel, cement, etc, which was notified on March 6.

Fares for second class and sleeper class travel in express trains have been raised by Rs 3 and Rs 5 per 100 kms, respectively. This will adversely impact millions of rural migrant workers, employees and small entrepreneurs, who have to frequently travel thousands of kilometers away from their hometowns. The around 20 per cent hike in freight charges will also have an inflationary impact. The anti-people nature of the Railway Budget is further exposed by the announcement of adding a ‘fuel adjustment component’ to passenger fares, which implies periodic increase in rail fares in tandem with the hike in fuel prices.

The railway minister is imposing these burdens on the people to cover up for his own inefficiencies, which has led to the bankruptcy of Indian Railways. The Railway Budget-making exercise has suffered from a steady erosion of credibility over the past few years, with budgetary targets going haywire in the course of the year. The Operating Ratio of the railways (how much is spent in order to earn Rs 100) for 2011-12 was budgeted at 91.1 per cent last year. Now, it has gone up to 95 per cent, exposing the colossal inefficiency of the railways.

Such a sharp deterioration of the financial situation of the railways under the United Progressive Alliance-II, from a position of surplus attained under the previous government, demands an explanation from the Prime Minister. With such massive overshooting of budgetary targets, the claims made in the Railway Budget of improving the Operating Ratio to less than 85 per cent in 2012-13 and to less than 75 per cent by the end of 12th Five-Year Plan (2017) cannot be taken seriously.

The glaring inefficiency of the railways can be further seen from the fact that it has missed its freight loading target by 23 million tones this year. This under-achievement is a repeat of last year and is inexplicable at a time when the economy has been growing at seven-eight per cent. There is a shortfall of over Rs 2,000 crore in gross traffic receipts from what was budgeted last year.

The credibility of the Railway Budget-making exercise has further suffered under UPA-II because of the plethora of promises made in a budget one year, only to be forgotten next year. There are several examples since Budget 2010 — 50 world-class stations, six bottling plants for fresh water, five sports academies, 522 hospitals and diagnostic centres, including 40 multi-speciality hospitals, 50 Kendriya Vidyalayas, seven new coach and loco factories, five new wagon factories, rail axle factories, and so on. The silence or obfuscation of the present railway minister on these promises confirm that these Budget announcements made by the former railway minister (present chief minister of West Bengal) in 2010 and 2011 were all gimmicks and a fraud on the Indian people. These false promises are now being utilised by the present railway minister to go for large-scale privatisation of the railways through projects such as Indian Railway Station Development Corporation, Logistics Corporation, etc, in the public-private partnership mode.

On the crucial areas of railway safety and modernisation, all that was offered were myriad committees and their recommendations, which never seem to take off the ground. The “feasibility” study of high-speed rail is going on for the past two years without any result. The freight corridor project is also not making any progress. All this reflect poorly on Indian Railways as an institution and shows that it has become incapable of project delivery. The railway minister in his speech was openly taking out his frustration by blaming the finance minister for inadequate funding provided to the railways through Gross Budgetary Support.

The Railway Budget documents show a gradual reduction in the staff strength of the railways from 1.37 million in March 2010 to 1.36 million in March 2011. The assertion made by the railway minister regarding fresh recruitment of 80,000 persons in 2011-12 cannot be verified in the absence of current employment figures in the Budget documents.

The Communist Party of India (Marxist) calls upon the people to protest against this anti-people Railway Budget, which has imposed new burdens in the form of fare hikes and increase in freight charges. The CPI (M) also cautions the people against a gradual destruction of Indian Railways under the present dispensation through false promises, gross mismanagement and inefficiencies.


Communist Party of India (Marxist) leader Sitaram Yechury in his reaction to the Railway Budget 2012-13 (part of which was published in People’s Democracy) in New Delhi on March 14

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First Published: Sun, March 18 2012. 00:39 IST
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