Her budget for the railways has left passenger fares untouched for the first time in 14 years, not tinkered with freight rates for essentials and has gifted projects to every district of her home state while accommodating major demands of her partners in the ruling coalition. Freight rates on non-essentials have been hiked by a mere 5 per cent and on parcels and luggage by 7 per cent to net Rs 600 crore.
The budget has all but silenced the Opposition which has reacted with caution at the Centre and with stunned silence in West Bengal. Even Jyoti Basu found little to fault. “I have noted that some of the state’s proposals have been included in the announcements made about new trains and projects. These announcements should be implemented in a time-bound manner,” Basu acknowledged. Even industry gave the budget two cheers.
That’s the good news.
The bad news is that the secret of Mamata Banerjee’s winsomeness lies in populism. She has also managed to break up Parliament on parochial lines.
Banerjee alienated MPs from states which were left out in the cold. “It’s a Bengal budget,” many hooted from the background.
In an unprecedented move, angry MPs from Kerala cut across party lines to interrupt her speech to point out that the southern state has not been given even a single new train.
Despite attempts by CPM and Congress party elders to calm them and a spur-of-the-moment decision by Mamata to give Kerala two new trains, they could not be stopped from storming the well of the House before staging a noisy walkout.
The Kerala team was followed soon after, separately, by Opposition MPs from Uttar Pradesh and Assam. But brushing away charges of having favoured Bengal at the cost of others, Mamata told a news conference: “If India is my motherland, Bengal is my sweet home.” She will be hoping Bengal will express its gratitude when it goes to polls next year.
West Bengal’s bounty from the budget amounted to five out of 19 new trains announced, including a Rajdhani Express between Sealdah and New Delhi, five out of 14 new rail line projects, seven out of 14 projects to double existing tracks and two out of four electrification projects. Besides, Rs 695 crore was earmarked to extend the Calcutta Metro from Tollygunge to Garia and a plan unveiled to take the circular railway to Dum Dum airport, making it the first in the country to have a rail link.
Among the allies, the DMK got two new express trains for Tamil Nadu and extensions of two trains, Gujarat’s BJP government was given five new trains while the Shiv Sena and BJP MPs from Maharashtra were gifted a “palace on wheels” as well as two links to neighbouring Gujarat. The Mumbai Rajdhani service will now be daily and the Pune-Howrah Azad Hind Express has become thrice weekly.
If allies were sent home happy, Mamata also tried to patch up with her former mentors in the Congress. In an unprecedented step, Mamata kicked off and ended her speech by wishing only two persons in the House by name — Prime Minister Atal Behari Vajpayee and Congress leader Sonia Gandhi. She took pains to bring the name of late Congress Prime Minister Rajiv Gandhi into her speech. This obviously paid dividends with Congress leaders later in the day toning down their criticism of her budget.
Her Rs 11,000-crore plan is a 22 per cent hike over last year’s outlay. An innovative mixture of leasing out of railway land to build motels and shopping arcades, a joint venture with Hudco to commercially develop five stretches of land connecting important cities with their suburbs, like Delhi with Panipat and Calcutta with Kalyani, leasing out of the railways’ fibre optic telecom network to private telephone companies besides renting out official saloons will help fund a tenth of the plan. Mamata hopes internal resources, a massive borrowing programme of Rs 3,668 crore and a Rs 3,800-crore Central budgetary support to pay for the rest.
However, critics said the figures for internal resources were contradictory. The budget claimed an “excess” of receipts over expenditure of Rs 576 crore which fell short of planned requirement of internal resources by some Rs 849 crore.
The gross traffic receipts for 2000-01 have been estimated at Rs 35,929 crores and ordinary working expenses at Rs 28,115 crore — an increase of nine per cent over the revised estimates. But what has eaten into the railways’ plan is a near-60 per cent increase in depreciation and a Rs 1,400-crore hike in pension requirement. This has reduced its net revenues from Rs 2,803 crore in 1999-2000 to Rs 1,791 crore in the coming fiscal.
Consequently, Mamata’s budget has done another fudge. It has deferred payment of Rs 1,500 crore in dividend to the Union exchequer after announcing a massive Rs 2,115-crore dividend.
To keep inflationary pressures low because of the mild hike in freight rates, she is reclassifying industrial coal, iron and steel, cement, limestone and certain petroleum products to a lower freight rate. Newspapers, magazines and medicines were exempt from the freight rate hike.
Her two biggest heads of expenditure will be a Rs 3,900-crore purchase of rolling stock, including some 23,000 wagons from units in Bengal, all of which are in the red, and a Rs 2,600-crore track renewal programme.
Construction of new lines makes up another sizeable chunk of her expenditure budget at Rs 825 crore. Indian Railways’ gigantic network has been rusting for lack of new rails to replace ageing tracks and Mamata’s move seems to have been welcomed by most railway insiders.
Her list of populist sops, too, is long. Mamata extended free travel facility for local commuting to students up to Class X and to girl students up to Class XII and a 75 per cent travel concession to Kargil war widows in second and sleeper classes and a gift of one journey to all freedom fighters by Rajdhani or Shatabdi to mark the golden jubilee of the republic.
Mamata also managed to jump onto the information technology bandwagon.
[In Orissa, Naveen Patnaik’s BJD-led alliance swept to power, handing a humiliating defeat to the ruling Congress. Om Prakash Chautala’s INLD has won majority on its own but his ally, the BJP, lost ground to a resurgent Congress. Manipur was heading for a hung Assembly.]
The immediate uncertainty in Bihar, of course, revolves around the question of who takes power. Laloo Yadav today made strong claims to forming a government on the grounds that his was the single largest party but the NDA leaders said the right to first invitation was theirs.
“We had a pre-poll alliance and we have the largest number of seats, so we are automatically the first choice,” a visibly demoralised BJP leader and chief ministerial aspirant Sushil Modi said. A buoyant Laloo Yadav, on the other hand, claimed he would secure the support of all “secular forces” in the Assembly and be able to prove his majority.
Smaller parties and Independents, who look set to take a sizeable chunk of seats in the new Assembly, will play a crucial role as the RJD and the NDA compete to outdo the other in the next few days. The odds are that whoever gets the first chance to form a government will be able to secure the support of enough Independents, one way or another.
While the NDA is essentially looking to the JMM, which has won 11 seats, for support in addition to Independents, Laloo Yadav is banking on support from the Congress, the CPI, the CPI (ML) and other smaller groups which stand ideologically opposed to the BJP. Although none of these parties have committed support to the RJD yet, Laloo Yadav said he was “confident” they would help him in “keeping communal forces at bay” in Bihar. “I am going to start contacting them tonight,” he said.
The RJD’s showing in the elections has perhaps surpassed the expectations of Laloo Yadav himself. Defying all manner of prediction and analysis, the RJD rallied on a groundswell of votebank support to retain its north Bihar fortress more or less intact. What is more, he made inroads into the BJP’s south Bihar bastion, taking away as many as 14 seats in the region even though he is opposed to the creation of Jharkhand, south Bihar’s rallying cry.
The BJP, on the other hand, suffered in north Bihar, perhaps because of the division of upper caste votes which the Congress took away in sizeable enough numbers. In south Bihar, the party’s performance has been rather indifferent, a fact that BJP leaders were hard put to explain.
Expecting a runaway victory till this morning, the NDA camp reeled under alternative waves of shock and depression as the trends began to emerge. The NDA had pressed all its might into the battle for Bihar — no less than a dozen Central ministers from the state campaigned throughout — but Laloo Yadav appears to have neutralised them single handed. “They had all joined forces against me and I was alone, they even pressed Hema Malini against me but the people of Bihar have given them their reply,” Laloo Yadav said.
Two factors that hit the NDA are immediately apparent: the division of the upper caste votes in north Bihar because of the Congress and the presence of a large number of rebel candidates in their ranks. It is perhaps an indication of the fact that rebels hurt the NDA, nearly 10 of them have come out winners against the official candidates of the alliance.
The NDA partners who had finalised the seat-sharing formula only about 15 days before the poll failed to persuade the rebels to retire from the contests. Many of them actually contested the seats despite warning from the party leaders.
The open war of nerves among the NDA leaders like Ram Vilas Paswan and Nitish Kumar spilled over to campaigns also as the two strong contenders for the post of chief minister rarely shared the dais for campaigning except only on a couple of occasions in the presence of Prime Minister Atal Behari Vajpayee.
In north Bihar regions like Darbhanga and the Koshi belt, the voters apparently resented the lack of development in the region under RJD rule but they also hated the power-hungry rivals in the NDA, vying for the post of chief minister before the polls.
In Darbhanga, where the voters elected the BJP in the last parliamentary poll, this time came out with fractured mandate with RJD and the BJP sharing seats. In the Koshi belt and in Muzzaffarpur, even the urban seats were regained by the RJD. In south Bihar, the split of urban votes led to re-emergence of JMM parties which contested for the first time without having any alliance with the mainstream parties, and took away BJP seats.
This year’s budget also reflects the dismal state of railway finances. There is no indication in the budget how this fundamental issue will be tackled by the railway ministry.
When the Congress was in government we had not defaulted on payment of dividend to the Central government even for one year. There was no default on the part of the railways at all.
We had managed to improve our internal resources and were showing a profit. However, the budget presented today has not only failed to pay dividends but also has not been able to show any profits. The budget does not provide any room for railways to become self-sufficient.
During our government we had carried out all track renewals and managed to maintain a good safety record. However, the current budget suggests that priorities have been set to influence the shift in budgetary grants for railways.
While much has been promised in the budget for generation of resources through internal resources to meet the safety and security issues, it is not clear what steps would be taken to realise them.
What is worrisome about this budget is its failure to pull the railways out of the woods. If the finances are not healthy, work all around suffers.
In Rajiv Gandhi’s government, double tracking was given priority. We were up-to-date in the backlog of track renewal. Now this backlog has again mounted. We ensured our freight target was met every year. We did this while meeting depreciation funds requirements. We were also able to pay dividends. We tried to move towards becoming self-sufficient. Indian Railways’ budgetary support declined, we were trying to stand on our own feet.
In this budget all this has been reversed. As much as Rs 1,500-1,800 crore deferred dividend. Only Rs 400 crore has been paid. They couldn’t meet the freight target. In spite of getting more out of the budget, they took another Rs 250 crore loan from the government. A gap of Rs 650 crore was mentioned in the budget. Where will it come from? It cannot drop from the skies. State electricity boards are not paying up.
Two decades of neglect (as alleged by Mamata) is untrue. About 23-24 per cent of the total budget was spent on track renewals.
There should have been new ideas. Motels are not railway priority. We set up the computerisation system for railways. Growth of container rails is possible only through a model system. Concor is providing Rs 300 crore for development of this system. How do we compete in such a system? This should have been spelt out.
Madhavrao Scindia was railway minister in the Rajiv Gandhi government