A STEP TOWARDS
CORPORATE ENTITY
Krishan
Anand*
With the presentation
of the Railway Budget for 2003-04 to Parliament on February 26,
the Railway Ministry has started the process of converting itself
into a corporate entity.
Without formally
accepting or rejecting far-reaching recommendations of the Rakesh
Mohan Committee, appointed by the Railway Minister more than two
years ago for studying the structural, operational and financial
working of the Ministry and suggest measures for improving the
deteriorating financial health of the Ministry, Shri Nitish Kumar
announced steps to implement many of the Committee’s suggestions
in keeping with the prevailing market philosophy in the country.
Working on this
railway reforms philosophy, the Minister neither increased the
freights nor the passenger fares. The Railway Ministry thinks
that the increase in the prices of goods traffic would bring down
the already declining railway share in this traffic vis-à-vis
the roads traffic. Similarly, the almost annual increase in passenger
fare in recent years has started giving diminishing returns to
the railways and transferring the passenger traffic to the road
transport. So much so that the prestigious Rajdhani and Shatabdi
superfast trains have started becoming less popular with passengers
who have of late switched on to air travel.
On the other
hand, the emphasis in the Budget has been to attract more traffic,
both goods and passenger, by lowering the tariffs. Offering other
incentives and providing safety and security to passengers besides
improving punctuality of the trains are some of its other features.
For the first
time the long-accepted market principle has been introduced under
which the price of a product of service should be reduced immediately
with humility and without any hesitation if the product or the
service is not patronised by the customers - in this case the
Rajdhani and Shatabdi Express travellers.
The thinking
behind the budget, it seems, is to attract more traffic and to
promote small-haul goods and parcel traffic that had been neglected
during the last decade at the cost of long distance bulk traffic.
The short-haul
goods and parcel traffic has switched on to the roads. The effort
is to wean over this traffic.
To do this the
Railway Minister has decentralised the decision-making and financial
powers at the zonal and divisional railway’s levels.
Bereft of the
jargon, the Railway Budget 2003-04 is simply a balance sheet between
the earnings and expenditure of the Ministry during the current
fiscal.
The Ministry
earns its revenue from transportation of goods and passenger traffic.
Its expenditure involves the cost of maintaining its 15 lakh employees
in the shape of their salaries, allowances and pensions, building
the rail infrastructure, operation and maintenance of the 63,000
route kilometre countrywide network with 7000 stations and over
13,000 goods and passenger trains running every day.
The construction
of the railway infrastructure involving huge costs, long gestation
periods and with comparatively less economic returns is not very
attractive investment proposition for the private sector in the
country.
The Ministry,
therefore, borrows money from the Central Government in perpetuity
but pays the annual interest on it, technically known as dividend.
Since the country
became independent in 1947, on an average only about 200 kilometres
of new railway lines have been constructed. As a result, many
far-away, hilly and economically backward areas are still outside
the railway network.
In this background,
the Railway Ministry has been performing the dual role of meeting
social obligations and commercial viability.
With declining
Central grant in recent years, the railway administration has
of late been arguing that their dual roles should be properly
defined and demarcated. According to them, the cost of the social
obligations of the services such as building new railway lines,
even if economically unviable or running more passenger trains
despite losses should be borne by the Central Government.
Similarly, the
building of the railway infrastructure should be the responsibility
of the Central Government, and not of the Railways, as it has
been doing in the case of roads, aviation and even communications.
Not only this,
the safety of the passengers on the running trains, while passing
through a State, is the responsibility of the State governments,
the Railways argues.
All these issues
have been properly addressed in the Railway Budget (2003-04).
The Ministry
officials argue that they would be able to run the mammoth railway
network on commercial lines only after these issues have been
properly sorted out.
The Railway Minister
also announced steps to equalise the subsidised travel to the
senior citizens irrespective of the gender distinction . At present
the senior citizens are granted 30 per cent concession in fares
in all classes and in all trains. While this concession is presently
available to men only on reaching 65 years of age, the women have
been getting it after becoming 60 . Shri Nitish Kumar announced
in Parliament yesterday that " now both men and women will
be entitled for the senior citizen concession on attaining the
age of 60 years". He also announced travel concession to
patients suffering from serious diseases like cancer, thalassaemia
major, heart and kidney ailments.(PIB Features)
*Freelance
Journalist
