Budget blues: Samar Jha

The Modi government's first railway budget was awaited with much anticipation. There was expectation of big-ticket reforms. There was hope for a far-reaching vision. On both counts, it has fallen short. Announcing one bullet train route and promise for more do not amount to a vision. Mere re-structuring of the Railway Board is reforms on a low key.

How different is this budget from budgets in the past? Not much. Sure, there are some good announcements. A "near Plan holiday", time-lines for project completion, emphasis in indigenisation (to keep the swadeshi lobby happy), focus on wagon leasing, upgradation of ticketing systems, large-scale expansion and integration of information technology usage, setting up of a railway university, digitisation of the Railways' land records, setting up of an innovation and incubation centre, forming a project formulation and management group in the Railway Board and a holistic approach to urban transportation are some of the progressive measures announced. The main body of the minister's speech reads uncannily like some budget speeches of the past. Where is the departure from the usual, where is the innovation and novelty?

It emphasises the need to raise resources from new areas, listing railway PSUs, private investments including FDI and PPP as options. No measures, however, have been announced to improve the Railways' dismal record in garnering investments through PPP. Therefore, the Rs 65,445 crore Annual Plan is likely to fall far short.

Aside of the increase in fares and freight announced before the Budget, no new measures have been announced to increase the traffic receipts, and thereby improve the internal generation of funds. Consequently, the Railways' finances projected in the budget are alarming. While announcing the need for Rs 40,000 crore for track renewal, only Rs 6,850 crore has been appropriated to DRF. DF, which finances safety and passenger amenities works, has got just Rs 300 crore . Only Rs 101 crore has been given to the Debt Service Fund. The Railways' is inches away from financial collapse.

The budget is perhaps unique for its many omissions from what could have been a path-breaking effort.

Corporatisation, organisational restructuring including a management cadre, accounting reforms, modernisation, amendment to the Railway Act to give teeth to the Tariff Regulatory Authority and rationalisation of work force could have lifted IR on to a higher orbit and a quantum growth path.

Mr Gowda got only a month to put together this Budget. Maybe, with a year's experience, he will not disappoint next year.

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Samar Jha
Former Financial Commissioner, Indian Railways