The Centre’s decision to do away with the Rail Budget has raised various apprehensions — on the Railways’ financial functioning and employee commitments. The Railway Convention Committee (RCC), which looks into its financial aspects, will cease to exist. RCC Chairman Bhartruhari Mahtab spoke to BusinessLine on the problems that may come up when the rail and general budgets are merged.
What will be the extent of parliamentary scrutiny of the Railways?
It will now be just be a discussion on demands for grants as chosen by the business advisory committee. But, it is not clear what will happen to the amendments that are actually moved by the members —whether there will be any decisions on the discussions that may happen. The foremost question, however, is whether the Railways is yet another department of the government. It is (now) not just another department — it is something more.
The Railways Standing Committee will function as any other department related standing committee. The RCC for all practical purposes was an ad hoc committee, not a full-fledged one. It used to decide how much dividend is to be given to the government.
You welcomed the decision to wind up the RCC...
Once there is no Rail Budget, there is no need to have an RCC. I was quite forthright in saying that I welcome the government’s decision to merge the budgets. But, there are certain questions
The Railways, unlike other departments, generates its own resources. It has the largest number of employees, the largest number of pensioners. All these expenses are met by Railways. What would happen now? Will the Government of India take up these expenses? It needs to be spelt out.
The statement of the Finance Minister has created an impression that certain decisions are yet to be taken. He did not specify that dividend will not be there. I had asked this question during the Monsoon Session to the Finance Minister. His reply was that “ultimately Finance Minister’s interest lies in the fact that his Ministry doesn’t have to give any money to the Railways”. He left many questions unanswered. Don’t make it an ad hoc decision. No other country has a separate rail budget.
At the same time, I am also conscious that there was a time before 1972 — before the Railway strike — when the Railways was spending 69-70 paisa to earn ₹1. It has come down to 93-94 paisa. With the Seventh Pay Commission, my estimate is the expenditure on salaries and pensions will go beyond ₹40,000 crore. This is an added expenditure for the Railways.
Why did the Centre do it now? If you add this additional expenditure on the Railways, the profit of even seven paisa may not be possible. So to earn ₹1, it may have to spend more than ₹1. The additional burden on account of implementation of Seventh Pay Commission is much more than the dividend the government received from the Railways!
Do you think this will lead to privatisation? What will happen to those populist announcements seen in every Rail Budget?
In a way, yes, it is a recipe for privatisation. Tomorrow, if certain decisions have to be taken by the Centre you cannot hold the Railway Board responsible. That is why I suggest there has to be some functional autonomy for the Railways. For fare revision, it is advisable that there is an independent body.
By merging it with general budget do you think the Railways’ demand of grants will not become populist? The government can make it populist.
For instance, the creation of a new zone is a demand. When Andhra Pradesh bifurcation happened, Andhra people demanded the creation of a new zone. That can be a part of the general Budget.
We will be forced to pass it. By stopping Rail Budget, you cannot do away with populist measures.