NEW DELHI: Finance Minister Pranab Mukherjee has put on the brakes on funds for the Indian Railways as a result of the cold war between the Congress and Mamata Banerjee in West Bengal. Boxed in between is the hapless Railways Minister Dinesh Trivedi who is putting on a brave face while scrounging for money. Railway Board Chairman Vinay Mittal has quietly admitted the Railways are desperately in need of a lot more gross budgetary support under 12th Plan. From the $1 trillion earmarked for infrastructure by the Planning Commission for the next Plan period, the cash-strapped Railways hopes to get a fair share.
“We’ve 149 projects in the pipeline and their progress depends on the quantum of budgetary support we receive,” Vittal said, right after a crucial pre-budget Railway Board meeting held in Banerjee’s fiefdom, in the Eastern Railway headquarters.
Didi wants the Centre to dole out a better package. Mukherjee wants the Railways to generate funds internally; at least as much as possible. The plan panel and the finance ministry are keen the Railways increase passenger fare and rationalise the freight structure. But, both Trivedi and Mittal are heavily banking on increased private participation in railway projects, including the modernisation of railway stations, developing large swathes of real estate held by the Railways and on the last mile connectivity plan, that has just received Union Cabinet approval. (Last mile connectivity will link the nearest rail lines to manufacturing hubs and mining areas.)
But CPI(M) Lok Sabha leader Basudev Acharya pooh-poohs the connectivity idea. Acharya, who has spent a decade chairing the Standing Committee on Railways before being ousted by arch-rival Banerjee, asks how it is supposed to happen. The Railways need an additional 18,000 wagons to stick to its current freight commitment. He cites the example of DVC (Damodar Valley Corporation) scaling down power generation last month. “DVC needs a minimum of eight racks of coal supply daily, it’s not even getting five on a regular basis—forcing them to cut generation. This is just one power station, I’m talking out, and it’s happening across the country,’’ he adds.
As for generating additional funds—through opening malls and multiplexes in railway stations and on unused railway land—Archarya says, “Ninety-nine per cent of Indian Railways funds come from passenger fares and freight (the costliest in the world). Only 1 per cent of the revenue comes from areas extraneous to its core operations. How can that fill in the gaping holes in the other two areas?”
Sixty-nine per cent of all goods in India are transported by road. The share of the Railways is a meager 27-30 per cent, of which a large quantity is attributable to subsidised goods transportation that it does gratis for the Central government. The Railways also have to pay 6 per cent annual dividend to the government from its earnings, which are fast dwindling with the rise in operational ratio. In fact, there is fear in some quarters that it could be even 100 per cent this year as against the target of 92 per cent. (By the time the budget is presented, the books are likely to look different.) Mittal says situation is getting trickier, by the day. If passenger fares are hiked, people going short distances may switch to road transport while long distance travellers would prefer taking budget airlines. Developing real estate and generating earning from other sources would take time. “It can only be done over a period of time; it cannot used to service immediate requirements,’’ says Mittal.
As a result, safe railway travel, which Trivedi says is his “top priority’’, is likely to get a short shrift. The Rs 17,000 crore granted from the Special Railways Security Fund proved to be woefully inadequate to upgrade the current archaic signalling system (the main cause of rail accidents) or appoint engineering personnel or renew the aging tracks. Until Mukherjee or Banerjee gives the signal, both rail safety and the railways minister will have to sweat it out in the box car.