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What, after all, is Rs 90,000 crore?

Rs 90,000 crore, is the cash surplus accumulated by the Railways in 5 years. Examine the past five years of the Railways, where it tried to function as a commercial entity with public ownership - a marriage of profits and politics - and the number begins to make sense. Gautam Chikermane reports.

business Updated: Feb 13, 2009 21:11 IST
Gautam Chikermane
Gautam Chikermane
Hindustan Times

Nothing, if you ask the people of Railway Minister Lalu Prasad’s constituency, who when told that the Railways had made a profit of Rs 70,000 crore in the four years to 2008, couldn’t relate to it. All they knew was that the fare from Hathua to Siwan in Bihar has fallen from Rs 7 to Rs 4.

Nothing, if you ask the Railway Board, who when armed with a Rs 15,000 crore surplus in 2006 and asked to reduce passenger fares by Re 1, said it would serve no end. The reality: for 88 per cent of travellers who pay an average price of Rs 10 per ticket, it does make a difference.

Nothing, if you ask Lalu’s critics, who point out that the turnaround of Indian Railways has come because, among many other things, Lalu allowed the board to operate freely, put the safety of passengers on the line by increasing the load on freight wagons. And through accounting jugglery.

Nothing, if you ask the readers of Hindustan Times (series ‘India Derailed’ that ended on Friday), who point out that the profits have come through manipulations like reduced sitting space, undue- and over-charging on ticket sales, food plates that are cleaned in toilets that stink, and complaints that are, well, flushed out of the system.

But zoom out and examine the past five years of the Railways, where it tried to function as a commercial entity with public ownership — a marriage of profits and politics — and the number begins to make sense. This is a feat large enough on its own steam. It becomes larger for an organisation like the Railways that we seem to have forgotten was a hair’s breadth away from bankruptcy.

Ask Lalu what Rs 90,000 crore means, and he says, as politically as ever: “Nitish Kumar had destroyed the Indian Railways and showcased it in the India Shining campaign. Today, the whole world is talking about Railways. We have been able to make this money without hurting travellers, customers, employees.”

If you were to shortlist two things that have brought in the Rs 90,000 crore, Sudhir Kumar, officer on special duty to Minister of Railways is quick to answer: “First is the mindset change that Railways is a ‘public utility that doesn’t need to make money’ — as if bankrupt organisations can serve society.”

The second paradigm shift, he said, is “The Railways realised that it is not a rail monopoly but a transporter operating in a fiercely competitive environment. Roadline, shipping line, pipeline, airlines are knocking the bottom out of Railways.” Fixing that, he said, brought in the money.

But a strong critic of Lalu who wished to remain anonymous said it was the rising global economy that brought in the money, money which Lalu has frittered away by not investing in infrastructure — no upgradation, no new locomotives, no freight corridor, no strategic partnerships. “People will pay a heavy price over the next few years,” he said.

Another criticism is that while Lalu has been talking about fare cuts in Parliament, the fare structure has been tweaked in such a manner that even though fares have been reduced, passengers end up forking out more money for the same journey.

An example of an HTcorrespondent paying for the Thiruvananthapuram-Mumbai length in a Mumbai-Delhi journey was rubbished by SS Khurana, chairman, Railway Board. “Why would anyone want to buy a tatkal ticket from Mumbai, when the facility exists only for Trivandrum-Delhi? If someone insists on buying it, they will have to pay the price.”

So, while the turnaround and the money are real — and driven by Lalu — a lot needs to be done with this money. Just what is something that the new government will have to decide in July.

First Published: Feb 13, 2009 21:07 IST