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This rail budget is a victim of 2014 general elections

Last Updated: Tue, Feb 26, 2013 21:34 hrs
BJP calls Railway Budget 'ordinary'

While the entire world has been looking at India as the engine of growth, India ought to have looked at Indian Railways as its engine of growth. But I am afraid my friend, Pawan Bansal, otherwise a very capable minister, has missed this opportunity.

The railway budget, as I see it, has become the victim of the coming general elections.

If you look at China 20 years earlier, they were 15 years behind the Indian Railways in terms of passenger route kilometres. Today, the Chinese railway system has 90,000 route km and is perhaps 50 years ahead of Indian Railways.



Railway efficiency and safety cannot be spoken about without modernising and using the latest available technology. It is unfair to the poor travelling public to expose them to a system which is not 100 per cent safe. Unfortunately, no time frame has been mentioned as to when the railways will become accident-free.

One measure of efficiency of the railway system is the Operating Ratio (OR) and the best ever OR was 74.7 per cent. In my budget of 2012-13, I had envisaged an OR of 84.7 per cent (had things moved as per the proposals).

But the actual OR at present is 88.8 per cent. A railway budget cannot be merely a year-to year-exercise; what I had planned in my budget was a target of five years " at the end of the

12th five year Plan we had aimed at bringing down the OR to less than 74.7 per cent.

What Pawan Bansal has targeted is an OR of 87.8 per cent at the end of 2013-14, which, according to the proposed budget figures appears impossible.

No growth is possible without the bulk movement of freight anywhere in the world. The major chunk of the railways' revenue comes from freight and it is because of this that passenger fare has been highly subsidised. In spite of that, year after year, losses are on the rise " currently, it stands at Rs 24,600 crore. Given the fact that actual revenue earned in the current year is less by Rs 3,300 crore from approximately Rs 89,000 crore to Rs 85,700 crore " this year's targeted revenue from freight pegged at Rs 93, 500 crore seems highly impossible.

The railways could easily add 2.5 per cent to the GDP. But the fact is that bottlenecks like traffic congestion have been slowing freight movement. The dedicated freight corridor has not materialised and freight and passenger trains are running on the same track. When freight movement slows, the turnaround time available to rolling stock would be more and it would create further problems for wagon availability.

India has a growing demand for power and steel. For that, coal is vital but as we can't carry coal at the required speed, it would result in a slowdown in capacity of both steel and power " it's a vicious circle. Given this scenario, I won't be surprised if the overall GDP growth comes down to less than five per cent. At this rate, we might even run the risk of going back to the Hindu rate of growth!

The across-the-board raise in freight rates by five per cent due to the fuel adjustment component could push cement, steel and petro products " which comprise 30 - 40 per cent of the revenue earnings " to the roadways, leading to further reduction in freight revenue, the bread winner of the railways. A time will come when freight income will no longer be able to subsidise the passenger fare.

There has been no worthwhile effect of public-private partnership projects " the Madhepura and Marora rail coach factories found no mention in the budget.

The budget, unfortunately, does not have any direction or vision as to where it wants to go. I think the compulsions of the political system have killed the golden goose that laid the eggs.

The Trinamool Congress MP and former railway minister was speaking to Kavita Chowdhury

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