Monday, 30th October 2017

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Not a whistle for reform

The railway budget builds on financial consolidation but continues to avoid some of the more fundamental questions

  • Published 28.02.15
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A small step in the right direction on the rail tracks may not necessarily be a giant step for reforms. The railway minister, Suresh Prabhu, while presenting his maiden railway budget, struck the right note by taking a medium term view of five years. Such a perspective almost automatically announced that Mr Prabhu was not interested in playing to the gallery: new passenger trains, tweaking of passenger fares and other similar cosmetic changes were not his concerns. He was concerned with the financial well being of Indian Railways. Here, the performance of the past year has been commendable and thus the minister has a substantial base to build on. One indicator of the performance of the railways is that the end-of-the-year surplus will be higher than what was estimated in the budget. This has been made possible by reining in expenditure and by keeping the revenues buoyant; the proportion of revenues spent as operating expenses has come down and the estimates for 2015-16 aim to bring it down further.

The improved financial situation allows the minister greater elbow room for the maintenance and improvement of tracks. But the longer term view of the minister is evident in the projected increase in the plan size: a 52 per cent hike to over Rs 1 lakh crore. The minister can envisage such an increased outlay because he has greater surplus at his disposal. The significance of this enhancement stands in no need of being underscored. It is critical for the railways to increase capacity and revenues. The railways have to invest in newer forms of technology. This is necessary for greater efficiency and also to make the railways more competitive. Mr Prabhu has an eye on the future and on the environment: this is indicated by his intention to set up a new solar power capacity of 1,000 megawatts.

All these proposals and measures are worthwhile and deserve kudos, but none of them and nothing in the minister's speech even begins to pose the most fundamental questions concerning Indian Railways. The Telegraph, since 1991, the inauguration of the era of economic reforms, has been trying through its leaders to draw attention to some of those questions. The two most fundamental questions - and they are related - are: why should the government be involved at all in the running of the elaborate and complex railway network the budget of which is close to 10 per cent of the Central budget? A second question: why should the railways not be open to private capital and enterprise? The railways form the most intricate transport network in the country but they are not under the transport ministry. This paradox does not strike anyone in government, the dispensation's ideological colour notwithstanding. The Telegraph will continue to ask these questions till a separate railway budget becomes unnecessary. Only then will reforms and railways move on the same track to power economic growth.