Bring back the Railway Budget

Merging rail finances with the Union Budget has led to less scrutiny, more accidents, and questionable priorities.

The ordinary Indian travels in appalling conditions in crowded trains, squatting on floors, aisles and in toilets. | Photo Credit: Rajanish Kakade

In 2017, the Niti Aayog submitted a white paper to then Railway Minister Suresh Prabhu. The paper titled ‘Dispensing with the Railway Budget’ made the case for scrapping a stand-alone Railway Budget. It was an unnecessary practice argued the paper, as neither the size of the Railway Budget, in the context of the full budget outlay, nor the contribution of the railways was that large anymore.

Prabhu in turn, wrote to then Finance Minister Arun Jaitley, batting for a merger and calling an end to what he termed a ‘colonial practice’. Jaitley concurred and the Bibek Debroy Committee was set up to examine the possibility. Chaired by Bibek Debroy, member of the NITI Ayog and co-author of that white paper, the committee recommended doing away with a separate Railway Budget, ending a 92-year-old-long history of separate Railway and Union Budgets.

For the ruling NDA government, there was also a political motivation behind the decision. The railway portfolio was often the rook on the chess board: a ministry held by strong regional partners in coalition governments and seen as a conduit for channelling regional aspirations and displaying political strength. For the 2017 NDA government, the decision to merge the Railways Budget with the Union Budget was a reflection of its solid majority in the Lok Sabha and its desire to hold firmly onto the financial reins, elbowing out any potentially ambitious ally.

It is the same hegemonic intent that has marked the BJP-led NDA’s charge of the Indian Railways since 2014. In the more recent past however, the Ministry led by Piyush Goyal from 2017 to 2019 and from 2021 onwards by Ashwini Vaishnaw has also been marked with a high level of both hubris and what appears to be rank incompetence.

It brings us back to this decision taken a few years back with the question: is it time to bring back the Railway Budget?

First, financial and performance accountability. In its 2022 report, the Comptroller and Auditor General, the government’s auditor said the Railways’ Depreciation Reserve Fund or DRF, which provides for the replacement and renewal of assets, was not just “insufficient” but that by providing money through an alternate fund, the railways had optically reduced allocations to the DRF. In short, accounts were “dressed up,” presenting working expenses and operating ratios in a better light than they were. Not just that, the report warned there was every possibility, not least against a depleting surplus, that replacement and renewal of over aged assets could become a burden for the Government of India. The ‘throw forward’ value or expenses budgeted to be met in later years was estimated at a startling Rs.94,873 crore.

Leave aside the growing backlog of these degenerating assets. For 2021-22, Indian Railways recorded its worst-ever operating ratios of 107.39 per cent: expenses have been much higher than sales or revenues. How much time has been spent in the Parliament discussing these creaking assets, both physical and financial? Would it have been better to have a Railway Budget that would ensure space, time and discussion around these numbers? After all, the country’s supreme audit institution raised several serious concerns in 2023. When does the country’s Railway Minister intend to address them?

The second motivation for abandoning a standalone Railway Budget was to move away from the purported ‘politicisation’ of the event. Let’s rewind to what the last few years have looked like, in terms of political optics. Amidst much fanfare, India’s first bullet train project was announced by the Prime Minister in 2017. Connecting Ahmedabad and Mumbai, the deadline for the entire project lapsed a long time back in 2022. It’s unclear how much progress has been made, but it is clear there is no high-speed train in sight until at least 2028. However, Vaishnaw, who has been reportedly overseeing the project, has been quick to find a political reason behind things stalling. In a recent press interaction, the Minister blamed the former Maharashtra government, led by Uddhav Thackeray, alleging that necessary permissions weren’t granted during their tenure leading to delays. 

And yet, even as deadlines slip away, much like the speed of the mythical bullet train, the BJP went ahead and promised a clutch of bullet train corridors in its recent manifesto. Politicising the railways then is perhaps a trick only one party is allowed to play.

When Vaishnaw was given the railways portfolio, business publications wrote fawning tributes to the technocrat, billing him Modi’s “whizkid,” an “infra expert” and “an efficacious entrepreneur and an anodyne politician.”. In 2024, 18 coaches of the Mumbai-Howrah Mail derailed in Jharkhand, killing two people and injuring 20, multiple coaches of the Chandigarh-Dibrugarh Express derailed in Uttar Pradesh, a goods train hit the stationary Kanchanjunga Express killing 10 people, and four coaches of the Sabarmati-Agra Superfast Express were derailed. All in just the first six months of this year.

But gone are the days when Railway Ministers resigned in the wake of train accidents; Vaishnaw was in fact retained as the Railway Minister even after the devastating triple-train tragedy in Odisha that claimed 293 lives.

Rescuers carry the body of a victim at the site of passenger trains that derailed in Balasore district, in Odisha, June 3, 2023. | Photo Credit: RAFIQ MAQBOOL

In recent weeks, Vaishnaw has chosen to make insidious references to questions around sabotage suspicions and once again reproved any attempt to turn the issue into what he terms a political debate. Let’s go back to the times when a single day was allocated to discussing the financial health, and more importantly safety and security aspects of a transport system that carries close to 43 million passengers a day.

As of August 2024, there are 51 Vande Bharat Express trains in operation in India. Reclining and revolving seats, mobile charging sockets, wi-fi and air-conditioned coaches, each ticket on an average priced at Rs.1200. In its zeal to boost per-passenger revenue, the heartbeat of India’s mode of travel has seen the production of more premium coaches, the launch of more high-end trains. All while bringing down the production of sleeper and general coaches.

In the peak travel months of April, videos on social media documented how scores of Indians were travelling. Squatting on floors, aisles and in toilets, virtual stampedes breaking out as many tried unsuccessfully to enter compartments that were gasping with the number of people already packed into. Perhaps it is on the day of the Railway Budget that the Minister will explain why in the last 10 years, general section seats have been slashed from 50 per cent to 43 per cent while AC coaches have increased from 15 per cent to 24 per cent. Do Indians who cannot afford a more luxurious air-conditioned journey not deserve to travel? Or perhaps they do, only if they are first ready to put their lives at risk, forced to travel as no living being should.

A Budget would be the most fitting way to stand up and speak to the true owners of India’s railway system: the people of India. Whose interests after all, are the railways being built to meet?

The greatest irony is that this premiumisation of the Indian Railways is happening even as losses incurred in passenger services have been steadily increasing over the years. In 2019-2020 for instance, the entire profit from freight operations were used to compensate for the loss from passenger and other coach services.

There’s another possible motive to consider. Why has not more money been pumped into replacing and renewing assets that would improve the quality of railway infrastructure, and the safety of its passengers? Why does the Railway Ministry remain stubbornly over-reliant on the transportation of coal for its freight earnings, even though the CAG recommended diversifying the freight basket in order to boost freight earnings? Given the utter lack of transparency on how to investigate or prevent this stream of tragic accidents, or into what ails the financials of the railways, one wonders: is the ultimate goal for the current government to wring its hands in despair and point to privatisation as the messiah and cure to all these problems, something the Debroy Committee had pitched for in its 2015 report? It has certainly been done across India’s airports and the results of the bidding process are there for all to see.

In a 2016 interview, Debroy responded to a question on whether scrapping the Railway Budget was a good idea, as a separate Budget ensured more scrutiny, with these words:  “I am glad that you are so optimistic about the Railway Budget being scrutinised… I wish I could be so blissfully happy about the great deal of scrutiny that the bunch of Railway Budget papers presented in Parliament brings.”

Recent weeks have displayed both the power and impact a strong opposition and intense Parliamentary debates can have on ensuring the government is held accountable. We have lost enough lives to railway tragedies that have gone unexplained and unatoned. If the Parliament, and a Budget are where answers will finally be found, bring it on.

Mitali Mukherjee is Director of the Journalist Programmes at the Reuters Institute for the Study of Journalism, University of Oxford. She is a political economy journalist with more than two decades of experience in TV, print and digital journalism. Mitali has co-founded two start-ups that focussed on civil society and financial literacy and her key areas of interest are gender and climate change.