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On same old track

THE RAILWAY MINISTER, Ms. Mamata Banerjee's maiden Budget _ the first of the new millennium _ comes as a big disappointment. With a stable Government at the Centre and no general elections around, there were high expectations of some bold measures to pr ovide a new direction to the tottering system. But, notwithstanding all the noise about providing a big thrust to the so-called second generation reforms, the Railway Minister has chosen to go on the beaten track of populism.

Bemoaning the declining share of the Railways in the total freight movement over the decades, Ms. Mamata Banerjee expressed her resolve to raise this share to 50 per cent by 2010 from 40 per cent now. However, while framing her proposals, she has targete d the freight rates, instead of the heavily-subsidised passenger fares, thus disregarding the saner counsels of the Railway Board. If the Railways is set to achieve this year's freight loading target of 450 million tonnes it is thanks to the buoyancy in the economy. Anyway, the freight earnings are expected to fall short of the target by Rs. 250 crores due to the drop in lead and the change in the commodity mix. Hence, the expert advice was to avoid any freight hikes and, in fact, to consider some reduc tion bowing to the compulsions of the market place. However, the Budget continues with the unimaginative policy of cross-subsidising passenger tariffs by higher freight rates. Given the huge cost escalations, following the recent hikes in the prices of h igh-speed diesel and power and in view of the desirable proposal to increase the allocation for passenger amenities by 52 per cent to Rs. 200 crores, the users would not have grudged a modest hike in fares. The Railways' finances were strained further t his year because of the escalation in fuel costs, higher rates of incentives, bonus to workshop staff, higher rates of family planning allowance and an additional burden of Rs. 900 crores because of the damage caused to rail property by the Orissa cyclon e. In spite of this, and notwithstanding the huge backlog of pending projects, the Minister has announced new lines, new trains and higher allocation for doubling of lines, gauge conversion and so on.

While there are the usual homilies about austerity measures, nowhere is there any mention of downsizing the workforce. Some 30 per cent of the 1.6-million staff is estimated to be surplus, and the Railways spent as much as 49 paise of every rupee earned in 1999-2000 to meet the staff costs. More disappointingly, after taking into account all other costs, such as stores, depreciation, and fuel, lease and miscellaneous charges, only one paisa out of every rupee was available for development and capital fu nd. This reflects a sharp deterioration in the working efficiency of the Railways. The operating ratio (the day-to-day working expenses as a percentage of gross traffic receipts) increased sharply from 86.3 per cent in 1996-97 to 93.4 per cent in 1998-99 . There are in the Budget, of course, a few good intentions aimed at improving the working of the system and raising additional resources. The Budget has announced a multi-pronged new freight policy, including running of high-speed goods trains, door-to- door service, and leasing routes to freight forwarders for non-bulk goods. While all these are no doubt welcome, the success of the policy will depend on how efficiently it is implemented. Again, Ms. Mamata Banerjee has promised commercial utilisation of surplus land available with the Railways to earn additional revenues, make greater use of telecom and information technology to improve efficiency and so on. Hopefully, she will act on these promises, and soon.

While the Minister has drawn up some plans aimed at raising additional resources through unconventional methods and improving the working efficiency of the system through technological inputs, these may largely remain on paper for quite some time. For, t he entire system has become lethargic. The real disappointment, however, is that the Rail Budget fails to provide a new direction by reorienting the priorities and rationalising the freight and fare structure.