Bansal’s rail budget 2013-14: reforms, populism share berth

A train engine moves past waiting travellers at a railway station in New Delhi. (AFP Photo)

In the first railway budget by a Congressman in 17 years, minister Pawan Kumar Bansal sought to walk a tightrope by combining political compulsions with fiscal prudence.

This being the last railway budget before the 2014 general elections, Bansal avoided increasing passenger fares — which were hiked by 20% just 34 days ago — but made rail travel costlier by tweaking some surcharges.

The travel cost hike will result from additional charges on superfast trains and ‘Tatkal’ tickets and higher reservation and cancellation fees, which will mop up Rs. 480 crore more for the railways.

With the railways’ finances deep in the red — a Rs. 24,600-crore loss incurred in 2012-13 —  Bansal attempted some innovative turnaround strategies, such as the public-private partnership route, without raising passenger fares which are among the lowest in the world.
Besides, Bansal announced that fuel prices would be linked to freight charges. The move will rake in Rs. 4,200 crore against the expected additional burden of Rs. 5,100 crore on account of diesel and electricity prices in 2013-14.

With the highest ever plan outlay of Rs. 63,363 crore, the budget this time was low on populism — a clear departure from the ones presented by regional leaders, such as Mamata Banerjee of the Trinamool Congress and Lalu Prasad of the Rashtriya Janata Dal.

Bansal announced much fewer new trains — 63 new express trains and 26 new passenger trains — than his predecessors. But extended the run of 57 trains and increased the frequency of 27 others.

He also announced several measures to improve passenger amenities as the deteriorating quality of railway services has been an irritant for the mobile, middle-class population which the Congress has been keen on reaching out to.
Prime Minister Manmohan Singh and leaders of the ruling alliance praised the budget, calling it reformatory for the railways - the last citadel of government monopoly, perhaps. But BJP leader Yashwant Sinha described is as "very, very pedestrian" and a "political budget" aimed at the general elections.

After the last month's fare hike, the railways' operating ratio -- operating expenses as a percentage of revenue - stood below 90% for the first time in four years. While the current ratio is placed at 88.8%, Bansal expects it to come down further to 87.8% by the end of this fiscal.

He also announced a debt service fund for loans taken for the dedicated freight corridor, outlined plans for India's entry into the 'Heavy Haul Club' and indicated the setting up of a regulatory body for railway tariff.


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