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Populism rules, prgamatism out in Mamata's budget

G. Srinivasan

NEW DELHI, Feb. 25

THE millennium's first budget and for a formidable people-friendly Railway Minister, Ms. Mamata Banerjee, a maiden one, the 2000-01 Rail Budget unveiled in Parliament has turned out to be an overt exercise in populism. The budget has given least consider ations to the underlying structural infirmities in the country's oldest and the largest mode of transport system has been heir to.

Although enough warning signals had been hoisted about the parlous state of railway finances and the Minister herself went on record bemoaning the escalating expenditure in the face of perennial resource constraints, Ms. Banerjee seems to have been baile d out by her neighbour from Bihar, the Union Finance Minister, Mr. Yashwant Sinha, who has let the dividend liability amounting to a staggering Rs. 1,500 crores be transferred to Deferred Dividend Liability Account.

The reason for this benevolent action from the Finance Ministry is not far to seek despite the brave posture being made out by Mr. Sinha that now is the time to bite the bullet. The pulls and pressures of coalition politics are harder than the bullet. Ap parently, stung by the dwindling share of rail traffic both in movement of passenger and freight and the dominant share of the roads, the railways have been pitching their demand for a ``level playing field''.

No less a person than the Chairman of the Railway Board, Mr. V.K. Aggarwal, admitted in the post-budget press conference that the railways had been losing its market share from a high of 88 to 89 per cent in 1960-61 to 40 per cent today with passenger tr affic share plummeting from a high of 60 per cent to 20 per cent now.

Stretching this point he said that while roads are being laid by the Government the railways had to lay lines on their own and ``there is no level playing field'' to compete for a fair share of the shrinking pie. He attributed ``inadequate line capacity' ' as one of the principal factors for the decline in railways market share.

Then what has this year's budget done in this direction? For construction of new lines, the provision for the next fiscal is Rs. 789.70 crores, against the budgeted Rs. 580.99 crores and the revised Rs. 504.54 crores for the current fiscal. In such an im portant area of line capacity the amount spent in the current fiscal has been pared down, what is the guarantee that it would not be repeated in the next fiscal, if the railways are unable to find resources to match their budgeted outlays.

Even in a crucial area of funding for rolling stocks, which is crucial for maintenance and running of the extant assets hassle-free, the allocation this year faces a severe shortfall. While Rs. 1,105 crores was budgeted to be spent on rolling stock for t he current fiscal, the revised outlay was Rs. 799.11 crores, leaving a shortfall of Rs. 306 crores.

What is shocking is that for the next fiscal the outlay under this head has been drastically pruned to Rs. 550 crores. If rolling stocks are not properly replaced or maintained and the cuts apply on them, the traveling public and the freight movement wou ld be the casualty as it is a compromise on safety standards. As it is the extant tracks are over-used and over-stretched in the busy ``golden quadrilateral'' linking Chennai, Calcutta, Mumbai and Delhi.

In signaling and telecommunications, against the budgeted Rs. 386.40 crores for the current fiscal, the revised outlay was Rs. 348.19 crores, though for the next fiscal a sum of Rs. 406 crores has been proposed. In these days when technology gets outdate d fast even as it is getting expensive, any modicum or modest hike in this vital segment is bound to be dangerous as the issue involved is one of safety, an area allegedly to be of ``the highest priority'' of the Railways.

No doubt, the members of the Railway Board could gloat over the fact that at long last the Government has begun recognising railways as ``infrastructure''; but as long as the Government does not grant them the requisite functional autonomy to take decisi ons on areas where they have advantage to exploit their assets to raise resources to fund their modernisation and expansion plans, the system would continue to be inadequately-

funded in various major areas.

The fact that passenger and suburban fares have been left untouched speaks volume of the lack of pragmatism particularly when financial state of the railways is none too strong and it is wrong to ignore endurably hard options when circumstances and neces sity dictate.

The Railway Ministry has not bothered to ``right-size'' its surplus staff even as it laments over the strain imposed on the implementation of the pay-hike recommended by the Fifth Pay Commission a few years ago. Yet another missed opportunity to demonstr ate a scintilla of realism by the Minister who does not want to be seen as anti-worker.

That the stepped-up Plan outlay of Rs. 11,000 crores is composed of deferred dividend liability of Rs. 1,500 crores, Rs. 600 crores from revision of freight/parcel/luggage rates, Rs. 3,668 crores through market borrowing, general budgetary support of Rs. 3,540 crores with the balance Rs. 3,792 crores emanating from a medley of normal internal resource, non-traditional sources of revenue and contribution from General Revenues for Railway Safety net works shows that the financing pattern has not taken due note of downside risks inherent in such calculations.

In the final analysis, Ms. Banerjee has succeeded to keep her image as an icon of the poor but at the cost of the system which she presides over. Her abnegations of responsibility by deferring dividend liability and the five per cent hike in freight of a ll commodities save the essential items might come to roost in the form of fueling inflation and denting the Centre's fiscal calculations before long.

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