By boycotting the railway budget, the National Democratic Alliance has not missed much. There is no dearth of recommendations about reforming the railways, the Expert Group (2001) being the most comprehensive. There was a Railway Safety Review Committee (1993) and an Integrated Transport Policy from the Planning Commission (2001). The railways themselves produced a Fare and Freight Committee Report (1993) and a status paper (2002). The issues are known. Growth requires infrastructure and the railways are a critical element of infrastructure. Railway reform issues have been discussed ad nauseam. Yet, in every railway budget, all one has is cosmetic tinkering. Mr Laloo Prasad Yadav is not the only culpable minister. Predecessors were equally guilty. If railway reform is the objective, the only option is to scrap railway budgets and the railway ministry.
Instead, railways should be corporatized and railway finances included in the general budget, with a provision for subsidizing social sector obligations. With this budget constraint and without bailouts from the general exchequer, railways will be able to take other decisions on a purely commercial basis. The railway budget for 2005-06 has no increases in passenger fares and no across-the-board hikes in freights. The cross-subsidization of passenger rates by freight rates therefore remains and railways will continue to be rendered uncompetitive vis-'-vis road transport, notwithstanding the recent improved performance of freight. The only 'historic' change is in the goods schedule.
The rationalization from 4,000 groups to 80 is indeed welcome and although freight rates have not been changed, this implies increases and some declines across sectors. There will be 46 new trains, extensions of 28 existing ones and increased frequency for 10 trains. Given the railways' safety record and inadequate funds for modernization and upgradation, such populist measures are hogwash. Will the concession to those dying in government hospitals be primarily for victims of railway accidents' Concessions to unemployed youth, farmers and milk producers, rural students and girls also display these populist sentiments. Private participation is encouraged, the private container companies being an instance. But these containers will continue to be transported on an inefficient and monopolistic network. Railways perform many services, all these are not natural monopolies. The natural monopoly argument will be difficult to sustain for anything other than rolling stock. If private participation is to be encouraged, why does the budget say that commercial railway land near major stations will only be developed by the railways' Instead of increasing ticket booking timings on the internet, why not outsource the function altogether' Without substantive reform, there will be no milk and honey.