All eyes on Laloo's Railway Budget

With Railway Minister assuring of no change in general class fares, the question is how does he plan to generate revenue.

A slew of announcements have been made since Railway Minister Laloo Prasad took over office, but the wait is now on for the more substantial changes that will be announced in his maiden Railway Budget on Tuesday.

HT Image

Surprise checks at railway stations, replacement of plastic cups with earthen ware and use of khadi bedding and upholstery are some of the new moves that Laloo Prasad has initiated since taking charge.

With the railway Minister having assured there would be no change in fares for general class travellers in his Budget, the vital question is how does he plan to generate revenue?

As shown by the recent spate of robberies and killings on trains passing through the minister's home state of Bihar and the accident on the Konkan railway last month in which 15 people died, there is much to be done if India is to be proud of its largest rail network under a single management.

Time and again, railway authorities and the government have admitted to a lack of resources to undertake long-pending projects to upgrade infrastructure on the 63,180-Km route for better services and safety.

For long, high freight rates have helped Indian Railways meet its social obligations through cross subsidies, but this may no longer be possible as the railways have found it leads to a large exodus to road transport.

Through attractive schemes and better rates, the railways have been striving with some success in the last couple of years to wean back some of the freight traffic.

It is in this scenario that Laloo Prasad might not want to further upset the industry and see a reversal in freight traffic.

The question of resources is vital, as over 240 projects related to new lines, gauge conversion, electrification and other safety aspects requiring an investment of over Rs 430 billion ($9.41 billion) are pending for a long time, some for over a decade.

"While the railways have been investing Rs 40 billion ($875.9 million) annually through internal accruals and around Rs 30 billion ($656.9 million) through market borrowing, the resources including what is provided from the general budget are inadequate to meet requirements," a senior railway ministry official told IANS.

With the new government's common minimum programme of governance having stressed the need to upgrade railway infrastructure, including linking remote areas with growth nerve centres, there are expectations of a higher budgetary allocation in the current fiscal to meet this objective.

Indications to this effect have emerged with Prime Minister Manmohan Singh having held discussions with the railway and the finance ministers in the run-up to the budget session of parliament.

This is not only a departure from the norm but also gives credence to Laloo Prasad's expectation of a higher budgetary support of up to Rs.20 billion ($437.9 million).

Operations of the Indian Railways are so vast that it covers four times the distance between the earth and the moon (384,000 km) in a day, claim railway officials.

Currently operating around 6,000 goods and 9,000 passenger trains daily, carrying 14 million passengers, Indian Railways is firming plans to add more trains according to Laloo Prasad's instructions.

"The minister is likely to announce the start of unreserved trains or Jan Sadharan Express for the convenience of poor people, providing them links from densely populated areas to industrial growth centres," said a railway official.

While the concept is not new, Laloo Prasad is expected to give the required thrust to the pending proposal.

He is also expected to continue with his predecessor Nitish Kumar's plan of linking state capitals with 18 Sampark Kranti Express, of which only one to Bangalore has so far been launched.

"The minister is mulling plans to promote pilgrim travel with the launch of budget tourism services or Desh Darshan Express, the route maps of which are currently being planned," the official disclosed.

Laloo Prasad is planning to not only carry forward some of the plans of his political adversary Nitish Kumar for better connectivity to remote areas, but also his successful attempts to improve the operating ratio of Indian Railways and raise resources for pending projects.