Easterly direction

Easterly direction

Mamata Banerjee was expected to present a populist railway budget. The proposals for 2001-2002 exceed anything that could have been imagined even from a politician whose determination to win her home state is proverbial. The unprecedented uproar in Parliament told only part of the story. Banerjee’s budget is not just biased, it is also irresponsible and it fudges the figures. To take the bias first. In developing, upgrading or consolidating railway networks, regional considerations should not be the main priority of policy-makers or, for that matter, of their critics. But in this instance, new expenditure is so heavily weighted towards one region that criticism on grounds of regional bias is unavoidable. A disproportionate number of the new trains as well as trains whose frequency is being increased or journeys extended are linked with West Bengal where Assembly elections are due shortly. It is a blatantly partisan exercise unredeemed by the fact that other regions will benefit in the process.

The prime minister and his economic advisory council both recommended passenger fare hikes. Banerjee, having taken the precaution of getting an all-party meeting to support her, has not touched passenger fares. Even a marginal increase in middle-level fares has been avoided. Instead, she has raised freight rates again, this time by three per cent for all but essential commodities. Tariffs for coal, iron and steel are being raised 2 per cent. Goods traffic accounts for two-thirds of railway earnings but as Banerjee herself acknowledged, the railways are losing freight to other means of transport. One reason for that is that frequent tariff hikes have made the railways uncompetitive. The railways estimate a small fall in freight earnings for the current year but as the Economic Survey points out, in April-December it is an almost 3 per cent drop compared to the same period last year. In the fog of election warfare, the railway minister seems blind to such realities and risks a further fall in business anddeterioration in railway finances.

Had Banerjee found new ways of raising revenue and financing her new trains, the great Indian travelling public would have had something to cheer about. There must be concern instead at the meagre additional allocations for safety (Rs 300 crore) track renewal (Rs 317 crore) and passenger amenities (Rs 54 crore). Budgetary support is static. The railways are counting on borrowing, internal resources and non-traditional resources to fill the gap. Last year Banerjee complained that the railways were deep in debt. Once again, however, she resorts to heavy borrowing (Rs 4000 crore) to finance the annual plan. This is piling up problems for the future. Internal resources fall short of target in the current year but, ever the optimist, Banerjee expects internally generated resources to be one of the mainstays of next year’s plan. As for non-traditional resources (including from fibre optics cables, the commercial use of railway land and trains for publicity), the sums anticipated are still small. This is badhousekeeping and will drive the railways deeper into the red. The budget is shot through with flaws and miscalculations and must be remedied. Look out for fare hikes and cancelled new projects after the Assembly elections.