Home » Business & Economy » #RailwayBudget2016 Prabhu full of fine words. That's about it

#RailwayBudget2016 Prabhu full of fine words. That's about it

Amitabh Pandey | Updated on: 14 February 2017, 5:47 IST


  • Suresh Prabhu\'s second Budget speech was full of hope
  • But there was hardly any concrete steps to fulfill them

The pitch

  • A cleaner railway, better money management topped agenda
  • Speedier travel & more IT were part of the agenda

More in the story

  • How hopeful should we be?
  • Is managing finances going to be easy?

Railway Minister Suresh Prabhu's Budget speech was full of fine words, the finest of which related to the new elevated suburban corridors for Mumbai.

The Mumbai suburban system has been grossly neglected for decades and the announcement, though late, is welcome.

The pace of progress of this project will, as always, determine whether the Mumbai commuter - beleaguered but aware - will view it positively. Prabhu must ensure visible progress and expeditious commissioning.

And the same holds for the other fine words in his speech: Results matter, fine words neither butter any parsnips nor satisfy customers anymore.

Where's the dough?

The core business of the railways is transportation of freight and passengers and this requires reliable infrastructure-terminals, track, signaling, rolling stock and tractive power.

These have to be put in place and then maintained to a high standard, all of which costs money - both capital expenditure and operating expenditure are high.

This leads logically to the issue of revenue from freight and passenger traffic. And here lies the fundamental problem - are the railways to work as a commercial enterprise or as a public service?

No clear and unambiguous answer has ever been given to this question. The confusion naturally extends to investment priorities and pricing of services.

The central government enforces non-commercial investment priorities and heavily subsidised passenger fares and the Railways goes along quietly, sometimes being more loyal than the king and doing the needful themselves without pressure.

Over decades, this led to the situation they find themselves in today. Freight, in most cases, is overpriced and passenger fares grossly under-priced. Investible resources are scarce and no sense of crisis enforces their disciplined allocation.

The minister mentioned rationalisation of freight rates, but was silent about passenger fares.

What is also noteworthy is that cost-reduction was stressed emphatically, both for the current financial year and the next, but there was no mention of the revenue-earning freight target for this year.

Is it being achieved or not and, if not, is it simply the nasty foreign hand that has slowed down the economy? Or was the original target a ridiculously high one?

No enterprise can run efficiently if it does not keep its feet firmly on the ground and allows expedience to triumph over reality.

Alternative sources of finance have been talked about for several years now and must be vigorously explored and fully exploited but is this enough? It has not proved to be so till now, but perhaps things will be different in future. Only time will tell.

Swachh Railway

A great deal of emphasis was laid on cleanliness and that is all to the good, but building toilets by itself is not enough.

First, the availability of water, staff with equipment and cleaning material has to be ensured to keep toilets usable. Equally important is the mindset and sanitary habits of the users.

The whole issue of cleanliness is viewed in a strange, unbalanced manner. The cleanliness of a large public infrastructure depends, to a great extent, on those using that infrastructure.

Having toilet facilities and well-equipped cleaning staff are merely necessary conditions for keeping railway premises clean, they are not sufficient.

Given the huge volume of traffic going through our major terminals, thorough cleaning has to be confined to certain 'slack' periods. And the onus of cleanliness has to be shared by the users of railway facilities.

A station is part of the social infrastructure where it is located. If a town lacks adequate drainage and sewerage, its station will suffer. Keeping the station drains unclogged will not be enough.

High hopes

Information technology is a powerful tool to transform certain processes and procedures and make life easier. Ticketing is one such area and the emphasis on using IT for customer facilitation is a no-brainer and must be pursued effectively. The time to market is critical here and there must be no undue time gap between promise and implementation.

An important caveat here is that making ticketing easier and refunds faster does not imply that the train will be clean, punctual, well maintained and safe.

When fixing core issues is difficult, it is convenient to focus on non-core - though still critical - areas that are relatively easier to handle. This does not serve long-term interests of the organisation or its customers.

The forthcoming special purpose vehicle for the Mumbai-Ahmedabad 'bullet train' was mentioned in Prabhu's speech and needs comment. When money is scarce it is common sense to allocate it so as to get the maximum bang for the buck - the most good for the most numbers.

The railways are suffering from severely distressed assets and grossly inadequate capacity. In these circumstances, there is little sense in developing a hugely expensive facility serving a miniscule fraction of rail users.

The money can be better used elsewhere. India and Indians are very quick to adopt and adapt technology when we need it and at the appropriate time we shall get even better technology than is available today.

Tokenism of this nature is an expensive indulgence. It makes for dramatic announcements, great press conferences and wonderful photo-ops. What we need is more track, upgraded track, better signaling and rolling stock, more reliable traction and better maintenance for all assets. These are, however, dull grass roots activities - no glamour there at all.

In conclusion, this Rail Budget was one full of hope: Hope that all will be for the best in this best-of-all possible worlds; freight traffic that did not manifest in 2015-16 will emerge ever stronger in the coming years, expenses will dramatically be curtailed despite the Pay Commission and other expenses; and sources of funding will emerge and be used to generate additional revenue that in turn will enable repayment without any pain.

It is good to be positive and hopeful, but there is a very thin line between fond hopes and improbable fantasies. Great effort is required to ensure that one does not stray from one into the other.

Edited by Joyjeet Das

First published: 25 February 2016, 10:06 IST
Amitabh Pandey @catchnews

An alumnus of St Stephens Collegeand the Delhi School of Economics, Amitabh taught Economics for threeyears , was a civil servant for twenty four and then moved to theprivate sector. He now pursues other interests viz: reading andwriting.