On the electoral track

Published : Feb 27, 2004 00:00 IST

Railway Minister Nitish Kumar, after laying the foundation of the Anand Vihar Rail Terminal in East Delhi on January 25. - SANDEEP SAXENA

Railway Minister Nitish Kumar, after laying the foundation of the Anand Vihar Rail Terminal in East Delhi on January 25. - SANDEEP SAXENA

The tone and tenor of Railway Minister Nitish Kumar's Budget speech indicates that the two years of painful self-discipline on the financial front were only intended to prepare the terrain for shedding all restraints on election-eve.

OVERSHADOWED by a grisly outbreak of lawlessness on the Railways, including one incident that claimed the life of a near-relative of the Prime Minister, Railway Minister Nitish Kumar in introducing his proposal for a vote-on-account for the expenditure on the Railways, began with a quick account of new security measures. These included the vesting of police powers to investigate and prosecute certain lesser crimes, in the Railway Protection Force, which has until now been confined to the rather narrow remit of keeping watch over railway property. Similarly, the investigation and prosecution of more serious crimes and offences on railway premises or property would be entrusted to the Government Railway Police.

Campaigners who have for long been working on the Railways' rather lax standards of security and safety, point out that the Railways as a commercial service should be bound by certain stringent rules of liability. Taking on the onus of prosecuting certain crimes would also involve legal liability for failing to prevent them. In other words, the assumption of police powers by a commercial service would, in other words, not be entirely devoid of an assumption of responsibility.

These doctrines of legal fairness and equity remain a distant concern though, since the main thrust of this year's Railway vote-on-account has been on embellishing the incumbent government's claims to a renewed mandate in the upcoming general elections. The Railway Minister has chosen to dust up a number of projects that have been languishing on the shelf for years together and give them a new prominence in his investment plans. The number of projects that the Minister identified in his speech was 230, which would involve a total outlay of Rs.43,000 crores for completion. Many of these are projects introduced on a non-commercial calculus, with either long-term expectations of revenue accruals or social objectives in mind. Election-eve is obviously a good time to inject some new life in them. But the financial realities of the Railways have compelled the Minister to seek certain innovative options in funding them. Nitish Kumar though, has chosen to be rather obscure about the sources of finance he intends to tap to meet the promised additional outlay of Rs. 20,000 crores over the next five years, under the umbrella of a plan that he has titled the Remote Area Rail Sampark (or connectivity) Yojana.

The theme of connectivity resonates through the Minister's speech in several ways. Obviously heady from the revolution in information and communications technology, he has proposed a variety of innovative schemes to rationalise the ticketing system in the Railways, using the Internet and cellular telephone network as potent accessories. Nitish Kumar has also taken his cue from the Prime Minister's emblematic project of improving road-connectivity between the principal hubs of economic activity scattered across the Indian map.

Funding remains a zone of considerable uncertainty. The Minister has promised innovative measures of funding, but little of any specificity. If extra-budgetary sources are being explored as a possibility, then a comparison with the National Rail Vikas Yojana that was announced in 2002 would surely be germane. The plan, which was to be implemented by a "special purpose vehicle" - the National Rail Vikas Nigam - has not produced the most distinguished results. The Nigam was floated in August 2002, but given its financial wherewithal - in the form of an injection of equity finance by the government - only in the Railway Budget last year. The purpose was to undertake a massive overhaul of the routes along the "golden quadrilateral" connecting India's metropolitan hubs, as also its diagonals. Also inscribed into the plan were specific projects for improving rail connectivity to the country's main ports and minimising the barriers of geography by constructing three "mega-bridges" - two over the Ganga and one over the Brahmaputra.

An investment of Rs.15,000 crores over five years was proposed through the Nigam. The actual achievement in 2003-04 is expected to be Rs.500 crores. The budget provides for an investment of Rs.1,000 crores in 2004-05, of which Rs.300 crores would be raised from the market as extra-budgetary funding. At this pace, it would evidently be a long while before the entire investment quantum of Rs.15,000 crores is met. The territorial jurisdiction of the Nigam, the "golden quadrilateral" and its diagonals - is one of the most traffic-intensive and profitable domains of the Railways. Funding for projects in this jurisdiction should, in normal circumstances, be feasible because of the assured returns on investment. The tardy pace of resource mobilisation for the Nigam should be adequate cause for caution in planning investment in the commercially unviable segments, as proposed by the "Sampark Yojana". These rather mundane calculations did not evidently restrain the Minister when he assured his audience that the proposed investments would involve an annual gain in direct employment of 300,000 through the construction period and indirectly of perhaps 55,000. That apart, the new jobs that would be permanently embedded as a consequence of these investments would number in the region of 18,000.

Continuing with the theme of connectivity, Nitish Kumar has proposed a programme of new services that seems extravagant even by the standards of an election year. Titled "Sampark Kranti" (or connectivity revolution) trains, these would number no fewer than 17 and involve non-stop connections between Delhi and the capital city (or some other major urban centre) of every State that is currently on the railway map. These state-of-the-art trains would provide a variety of value-added services. The catch though, is that only one of the 17 has been firmly scheduled for launch, between Delhi and Bangalore. Beginning on a thrice-weekly schedule, the train would be converted into a daily service by October 2 this year.

Observers, including several former officials of the Indian Railways, have confessed to a sense of bewilderment at the proposed new service. Rajdhani Express trains, modelled on the super-fast, limited-stop services that were originally introduced between the national capital and Mumbai, now run to a number of State capitals. Their frequency remains somewhat sparse because of the problems of route congestion and limited track availability. The technical feasibility of introducing a similar service, on the very same routes, even if under a different name, is not evident at this stage. The Minister's decision not to commit himself to very firm schedules for the new service, with one exception, may in this sense, be a measure of abundant prudence.

Since he initiated a long overdue rationalisation of fares and freights in the 2002 Budget, Nitish Kumar has presided over a gradual improvement in Railway finances. The year 2003-04 saw receipts from passenger and freight traffic falling below initial expectations, but the financial surplus has been higher than budgeted because of exceptional savings in operating expenses. The ratio of "ordinary working expenses" to total receipts - the so-called "operating ratio" - which had spiralled over the 98 per cent mark in 2000-01 and hovered at a perilous 96 per cent in 2001-02, has been brought down to a more manageable 92.6 per cent in the current year. The dividend on capital which was due to the government was only partially met in those years of financial stringency.

Under Nitish Kumar's renewed tenure in the Railway Ministry, which began with the 2002 Budget, matters have improved gradually. Dividends have been brought back to par and the deferred dividend liability that was incurred during his predecessor, Mamata Banerjee's tenure, has been met to a large extent. But the tone and tenor of his Budget speech this year, indicates that for Nitish Kumar, two years of painful self-discipline were only intended to prepare the terrain for the shedding of all restraints on the eve of the elections. It is just as well for the future financial health of the system then that the funding sources for most of the projects he has promised remain at this stage hypothetical. They can, in this sense, be quickly discarded once their political potential has been exhausted.

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