Thursday, February 29, 2024

Railway Budget

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It cannot be denied that Railway Minister Mallikarjun Kharge has set guidelines in his budget for the Railways to be healthy under his successor. Of course, announcing many new trains on the eve of the general election smacks of populism. Passenger fares and freight rates remain unchanged. But the financial performance in 2013-14 is likely to deteriorate. The operating ratio is now higher, 90.8 % against the budget target of 87.8%. But freight volumes are expected to increase with the result that there will be larger funds forthcoming. In fact, it has been scaled up by 5 million tones in spite of the fact that the Indian economy is slowing down. Admittedly, the hike in diesel prices may have diverted road traffic to the Railways.

The Railways should however gather momentum in increasing freight particularly of coal. The shortage of coal is hitting the power sector. Coal is not mined in many areas because of the absence of rail links. Coal India has the resources to enable the Railways to provide the necessary linkage. Rail links to ports should also augment imports. In this effort, the private sector should be persuaded to invest much more. To that should be added foreign investment to make the picture look up. People are willing to pay the full commercial value for transport services including the cost of seats. Upper class compartments should no longer subsidize lower class fares. Dynamic pricing is called for and an autonomous Rail Traffic Authority should be set up. More internal resources are needed by Railways for modernization. But that will be possible only if political patronage is done away with.

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