Rollback of budget proposals is not an unknown phenomenon. But the announcement on Thursday of a withdrawal of fare hikes mooted in the Rail Budget for 2012-13 is unprecedented and a complete mockery of established official decision-making processes. The original Budget was presented in Parliament on March 14 by a Minister, who was not even given an opportunity to reply to the debate on the proposals in both Houses. Instead, the Minister, Mr Dinesh Trivedi, was summarily replaced, though not at the instance of the Prime Minister or even the Opposition. The demand came from his own party, or rather, its supreme leader, who was the Rail Minister earlier and is now the Chief Minister of West Bengal. The new Minister, Mr Mukul Roy – from the same party that is a coalition partner in the ruling Congress-led United Progressive Alliance – was prompt in scrapping the key proposals of his predecessor's forward-looking Budget. These, apart from upward revisions in passenger fares, also included establishing an independent rail tariff regulator and inducting two new Rail Board members dedicated to safety issues and public-private-partnership ventures. Mr Roy effectively ended up presenting a new Rail Budget following the same old beaten track.

What makes this whole episode particularly unfortunate is the fact that there was a near-unanimity this time around even within the political class over the need for drastic steps to rescue the Indian Railways (IR) from virtual financial collapse. The only real opposition to Mr Trivedi's fare hikes came from his (and Mr Roy's) party, while the others expressed mild customary disagreement at the most. In any case, they were nowhere as vocal as the Railway unions, vociferously in support of the long overdue increase in passenger fares. The decision to roll back the hikes amounts to snubbing not just the Prime Minister (who had praised Mr Trivedi's Budget) or the professional managers at the country's largest and most complex organisation, but also those representing its 14-lakh-strong workforce and most keen to prevent the IR “going the Air India way”.

Reverting to the old fares for all but the premium AC segments basically means the IR would now be able to mop up hardly a tenth of the roughly Rs 5,500 crore of additional revenues that Mr Trivedi's rationalisation exercise had targeted. It only reinforces the already excessive cross-subsidisation of passenger traffic by freight. While passenger fares have practically remained the same in the last ten years, the same period has seen a near-doubling of freight charges across commodities. The inflationary impact of the latter on the common man is arguably much greater than the perceived comfort from low-cost rail travel undertaken only occasionally. It is not difficult to explain this to the aam aadmi , which is what enlightened politicians ought to be doing. Mr Trivedi tried it, and unfortunately couldn't convince his own party top brass.

Related Topics