PMs prudence note ignored,Rail Budget will bear Didi stamp

Putting the finishing touches on Budget 2010-11,Mamata said it would be dedicated to the common man.

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In October 2009,Prime Minister Manmohan Singh forwarded a note prepared by the Planning Commission to Railway Minister Mamata Banerjee on the problems being faced by the Indian Railways and the ways these needed to be addressed. The next budget must include a minimum increase of 10-15 per cent in second class passenger fares with no increase for freight, one of the recommendations stated. When Mamata presents the Rail Budget tomorrow,she may do just the opposite: hike the freight rates while leaving the passenger fares untouched.

The disconnect between the Union government and Railway Ministry on the subject of reforms is evident. If Lalu Prasad Yadav declared he would go down in history as a railway minister who never hiked fares,his successor looks set to chart the same course. So,despite the Planning Commission pushing for an automatic indexation of fares in line with an increase in fuel costs meaning fares increase automatically whenever there is a fuel price hike Mamata is unlikely to oblige. Another Planning Commission proposal that fare fixation should be entrusted to a Statutory Rail Tariff Regulator has not cut much ice with the Railways for years now.

Putting the finishing touches on Budget 2010-11 today,Mamata said it would be dedicated to the common man.

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After years of cross-subsidisation of passenger fares,the government has come around to believe that by levying high charges for AC First Class and for freight to make up the cost,the Railways has reduced its competitiveness. So while the freight traffic has shifted to road transport,premium passengers are going in for air travel even for short distances.

The note forwarded by the Prime Minister said subsidisation of passenger services was also creating an artificially heavy demand for passenger trains,with frequent stops. This reduces line carrying capacity for longer distance traffic,which is the Railways real comparative advantage.

On the issue of pending projects and the economic viability of new ones too,Rail Bhavan and Yojana Bhavan are operating on two different frequencies. Calling the large number of new lines with no prioritisation among them a very difficult problem,with no easy solutions,the government has been asking the Railways to prioritise projects. It believes unviable lines should only be adopted if the state government concerned is willing to bear half the cost.

However,Mamata has made it clear that social viability and not just economic unviablity should be used to measure projects. Her home state West Bengal looks set to be the biggest gainer of this social viability theory in the Railway Budget tomorrow,with the minister expected to announce a slew of projects in the state.

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In fact,the note sent to Mamata had even questioned the very concept of a Railway Budget. The system of presenting a Railway Budget to Parliament is also a colonial hangover which only serves to politicise what should be areas of commercial decision, it said.

Mamatas views on this particular suggestion are not yet known,but one thing is imminent: February 24 will again throw up a Rail Budget where politics will override commercial decision making.

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