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Railway’s cost-sharing plan with states sparks off federalism debate

States would bear 51% cost of a project as against the railway’s share of 49%, according to a proposal.

india Updated: Jul 07, 2016 20:17 IST
Srinand Jha
Srinand Jha
Hindustan Times
Indian Railways,Suresh Prabhu,Centre states ties
The Railway Minister wants states to share burden for new railway projects.(Arun Sharma/ HT photo)

A “Centre vs states” battle is seemingly being revived ahead of Parliament’s monsoon session beginning July 18, with opposition MPs determined to block the NDA government’s plan to have states bear partial costs for executing railways projects.

Earlier this year, railway minister Suresh Prabhu dashed off letters to chief ministers, calling for the participation of states to create Special Purpose Vehicles (SPVs) to raise money from the market to execute pending projects. According to the plan, states would have to bear 51% of the project cost as against the railway’s share of 49%.

Sources said the Dinesh Trivedi-headed parliamentary standing committee witnessed major fireworks on the subject during its meeting on Tuesday, with some raising the “federalism” debate, arguing that the plan would benefit the rich states at the expense of the poor.

The move is also being seen as an attempt to decrease the fiscal burden on the Centre before integration of the railway and general budgets.

“The railways have integrated the country, but the current plan will lead to its disintegration. The Constitution does not permit the government to take a unilateral decision on allocating 49% resources from the Consolidated Fund of India to one or a clutch of states at the expense of others. The railways cannot discriminate between the rich and poor states,” Trivedi, a former railway minister, said.

Janata Dal (United) leader Bashisht Narain Singh said his party would oppose the “government’s move to gift bounties on richer states” within and outside Parliament. “This “pro-rich” government is conspiring to snatch away facilities of cheap travel from the poorest sections of society,” he said.

The concept was first floated during the regime of UPA-II.

“But our idea was to offer this option for port connectivity or coal linkage projects. The current government is baulking from the “social commitment” principle and relinquishing its fundamental responsibility of providing for safe and affordable train travel,” Congress leader and former railway minister Adheer Ranjan Chowdhury said.

Although he represents Odisha – which has formalised the cost-sharing agreement - Biju Janata Dal leader Balachandra Manjhi said the concept was “principally flawed”.

Mekapati Rajamohan Reddy of the YSR Congress also said the central government needed to ensure that poorer states are not left behind.

Government sources, however, said that state governments have responded positively to the idea.

“Seventeen states have agreed to firm up agreements with the railways. None of the states have raised the federalism question so far,” an official said.

First Published: Jul 07, 2016 20:17 IST