The price of safety

Print edition : September 15, 2001

FACED with mounting criticism over a spate of railway accidents, the Union government announced a hike in railway fares on August 29. Ironically, the government, which has been repeatedly charged with neglecting the safety aspect, reassured passengers that the fare hike was intended for their own safety. The hike - termed a surcharge that will be imposed for the next five years - is expected to increase the Indian Railways' revenues by Rs.1,000 crores in a full financial year and Rs.500-600 crores in the current fiscal.

Minister for Railways Nitish Kumar announced that the Union Finance Ministry would contribute Rs.12,000 crores by way of grants to the newly established Rs.17,000-crore Special Railway Safety Fund and the remaining Rs.5,000 crores would come from the revised fares, over a period of five years. Although the invocation of safety concerns gave a sugar coating to the fare hike, there is concern that the establishment of the fund hardly measures up to the response that the Railway Safety Review Committee, headed by H.R. Khanna, sought from the government in 1999 (Frontline, August 3, 2001). Moreover, the failure of the Finance Ministry to make any categorical commitment on a schedule of disbursements for the fund is galling to passengers, who have been asked to participate straightaway in building the Fund. The Finance Ministry has not indicated its commitments in detail over the next five years. Indeed, doubts have been expressed whether the Ministry will keep its promise.

The fare hike flies in the face of the Khanna Committee's recommendation that the "Central government provide a one-time grant to the Railways so that the arrears in the renewal of tracks, bridges, rolling stock and signalling gear are wiped out." The committee observed that the Railways "is not in a position to fully finance the level of investment required".

Mamata Banerjee, Nitish Kumar's predecessor in the Railway Ministry, had established a fund while presenting her last Railway Budget. During the current fiscal this fund was projected to amount to Rs.303 crores. Critics say that another fund with another name is unnecessary.

The crux of the Khanna Committee report is that rail safety in the country is an area that needs urgent investment - in new stocks of assets. Almost every category of the Indian Railways' assets is in need of not just repair but outright replacement. This applies not just to its aged rolling stock but to tracks, signalling gear and bridges. The committee emphasised that the Railways could not replace overnight such a huge backlog. For the sake of safety, the committee recommended that the government step in and take the responsibility for the replacement of overaged stocks. In doing this, the committee was also guided by the fact that the Railways cannot function on purely commercial lines.

The Indian Railways, contrary to its general portrayal as a bleeding business venture of the Indian state, actually makes a substantial operating profit. For instance, the last Railway Budget envisaged that the Railways would earn traffic receipts amounting to about Rs.40,000 crores during the current year. After accounting for expenditures, the Railways are projected to be left with a surplus of Rs.2,183 crores. The Railways, after accounting for dividend amounting to Rs.1,352 crores, are projected to have a surplus of about Rs.830 crores. Of this, Rs.511 crores is for appropriation to the Railway Development Fund, Rs.303 crores to the Railway Safety Fund established by Mamata Banerjee and the remaining Rs.17.43 crores to the Capital Fund. Apart from these, there is the Depreciation Reserve Fund. Since all these funds are basically meant to bring about a regeneration of capital assets, the expenditure from each has implications for safety. The classification of Plan heads in the Railway Budget allows for investments under heads that have a bearing on safety in the Indian Railways. Thus, track renewal, bridge works, rolling stock and other heads figure separately in the Budget.

Critics of the government suggest that the fare hike is nothing but an ill-concealed attempt at resource mobilisation in the face of a serious threat of the last Budget's calculations going haywire. They fear that the hike will enable the Railway Ministry to shuffle allocations for heads that have a safety implication into the new safety fund without actually incurring additional expenditure. Meanwhile, the Finance Ministry's commitment, spread over a rather long time scale of five years, raises doubts about whether the Fund will actually result in safer rail travel. The only thing that is certain is that passengers will pay more with immediate effect.

The regressive nature of the fare hike has attracted criticism. The uniform surcharge of one rupee on every "originating passenger"(simply put, any passenger who buys a journey ticket) travelling to a distance of up to 500 km implies that the burden will fall heavily on short distance travellers, particularly those commuting by suburban trains. In percentage terms, the rate of increase will be heavy for these commuters. For instance, a passenger who used to pay Rs.4 for a trip in the Mass Rapid Transit System (MRTS) in Chennai will now have to pay Rs.5 (including one rupee as surcharge), implying an increase of 25 per cent. By any standard, this is a steep increase. Second class season ticket holders travelling on such rail systems will have to pay Rs.10 as surcharge. In effect, the surcharge will affect low- and middle-income passengers more than others.

The impact of this sharp increase in fares could have other consequences, which have a bearing on safety. R. Elangovan, working president of the Dakshin Railway Employees Union (DREU), told Frontline that the fare hike would result in suburban rail passengers being "chased to the roads" because of the wider differential between train and bus fares.

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