Red signal

The Railway Budget attempts to take forward the Vision 2020 plan of Mamata Banerjee, but the Trinamool Congress leader now cries a halt.

THE Railway Budget for 2012-13 presented in Parliament broke new ground as a book-keeping exercise aimed at bailing the Railways out of their financial troubles and in terms of putting in peril Railway Minister Dinesh Trivedi's continuation in the post. His proposal to hike passenger fares provoked the ire of his party leader, the Trinamool Congress supremo Mamata Banerjee.

Even as the fate of the Minister hung in the balance, albeit Prime Minister Manmohan Singh's assurance that the budget he presented would go through the process to secure the imprimatur of Parliament, the proposals themselves for the inaugural year of the Twelfth Five Year Plan do come as a refreshing change. They unveil a vision underpinned by a plan of action in various areas to bolster this arterial mode of transport.

Ironically, it was Mamata Banerjee who, as Railway Minister, presented the Indian Railways' Vision 2020 document in December 2009. Though she was averse to undertaking any unglamorous moves, such as burdening passengers with fare hikes, the vision she rolled out emphasised a higher growth trajectory, network expansion and capacity creation.

Alongside, it also gave importance to train safety, environmental sustainability and the introduction of innovative steps in passenger and freight services that gave users value for money.

So when her protg took over the reins of Rail Bhavan a couple of months ago after Mamata herself moved to Writers' Building in Kolkata as the Chief Minister of West Bengal, it was but natural for him to begin the hard exercise of achieving the goals of the Vision Document. So, what Mamata envisaged as a long-term plan, Trivedi, who holds a Master's degree in business administration, took up in his own fashion.

Instead of playing ducks and drakes with the sparse financial resources that the Railways had in its kitty, Trivedi worked out a pragmatic plan that took a long-term perspective to put the Railways back on track by efficient management of the men and material they had at their disposal in huge numbers. Yet another compulsion to initiate a revision in freight rates and passenger fares was that the internal generation of resources, which was projected at over Rs.5,000 crore for 2011-12, had not materialised and this left the system with no option but to bite the bullet. At least, the increase in passenger fares was inevitable since they had not been touched since 2002-03.

In the run-up to the budget, the Railways announced, on March 6, increases in freight charges for most commodities, including coal, foodgrains and fertilizers, with immediate effect. The charges went up by 20 per cent for most of the commodities, though the mandarins in Rail Bhavan said the impact would be 8-18 paise a kilogram of commodity, that is, an increase of Rs.80 to Rs.120 a tonne. In all, the move is likely to bring the Railways Rs.18,000 crore in a full year.

Then followed the hike in passenger fares in the budget on March 14. The Minister raised fares by two paise a km for suburban and ordinary second class, three paise a km for mail/express second class, five paise a km for sleeper class, 10 paise a km for AC chair car, AC 3 tier and first class, 15 paise a km for AC 2 tier and 30 paise a km for AC first class.

The hike in passenger fares, and not the hike in freight rates, raised the hackles of Mamata, who will not brook any stain on her image as a pro-poor politician. She gave Trivedi the choice of rolling back the increases or resigning.

While industry and almost all political parties condemned the twin hikes, five railway unions the All India Railwaymen's Federation (AIRF), the National Federation of Indian Railwaymen (NFIR), the Federation of Railway Officers Association, the All India RPF Association and the Indian Railway Promotee Officers Federation wrote to the Prime Minister supporting the fare hike whole-heartedly and stating that the increase is not only long overdue but also modest in its impact.

Be that as it may, Railway Budget 2012-13, barring the twin hikes, has many novel features that can help the system get back to normalcy if they are implemented in letter and spirit.

As the Railways resolve to move ahead by roping in private players in important segments of their operations in the years to come, the budget announced the setting up of the Indian Railway Station Development Corporation to redevelop stations through public-private partnerships (PPP) and the Logistics Corporation for the development and management of extant railway goods sheds and multi-modal logistics parks, besides making attractive the existing private investment schemes for wagon leasing, sidings, private freight terminals, container train operations and rail connectivity projects.

With competition from other carriers in the transport industry intensifying, the Railways have woken up belatedly to rev up the system by creating a new Board Member (PPP/Marketing). This is widely construed as a right signal to assure prospective investors that the Railways mean business.

Interestingly, the focus on safety is reflected in the setting up of a Railway Safety Authority as a statutory regulatory body as suggested by the Kadkodar Committee. It is also equally reassuring that the other focus areas range from tracks, bridges, signalling and telecommunications, rolling stock, stations, level crossings and freight terminals.

Another laudable lineament in the budget is the proposal to modernise the 19,000-km high-density network that hauls 80 per cent of the traffic in the Golden Quadrilateral route of Delhi-Mumbai-Chennai-Kolkata. This is particularly noteworthy in the face of the glacial progress of the dedicated freight corridors.

In sum, in Railway Budget 2012-13, Dinesh Trivedi has only attempted to translate the bold vision that his leader Mamata Banerjee envisaged for the system. But the small steps he took in this direction turned out to be a lethal serving not only for his leader but also for him.