The Hindu Business Line : A steaming performance

For Mr Lalu Prasad the constant interruptions from the Opposition Benches mattered little because this was his moment of glory. Presenting the Railway Budget for 2007-08, the Railway Minister was not just reeling out the monolith organisation's finances and plans for the next year but informing the nation of what is the greatest turnaround story of any public utility in its history.

On the basis of the evidence presented before Parliament, the Railways has entered the record books for remarkable management; till three years ago, most Rail Budgets were a two-line story of losses and promises to do better next year underlined by a constant need to raise fares and the fear of doing so. No more; the Railways has shown that when it comes to experimenting with existing resources (by and large) to become more efficient and show profits, management textbooks may just have to be rewritten. The figures the Minister presented speak volumes of the recovery that began in 2002-03 and has continued on the back of the rapid growth in economic activity. Freight and passenger revenues have moved up 17 per cent and 14 per cent respectively over the previous year with the best-ever operating ratio of 78.7 per cent.

This last statistic alone represents the efforts the Railways has put in to maximise capacities through time-saving measures, differential pricing policies for freight routes and a slew of new measures that Mr Lalu Prasad has built upon, most notably through the public-private partnership route to engage private capital in the development of more modern freight carrying systems. Claiming a pre-dividend cash surplus of Rs 20,000 crore the Minister can afford to be generous and help in the fight against inflation without worrying, like his predecessors used to, about bailouts by a debt-ridden Centre.

Freight rates for diesel, petrol and ammonia have been cut by 5 per cent, and fares on second-class passenger and non-superfast trains have been reduced by a rupee. Taking a welcome cue from its success so far, he has expanded the scope of differential discounts for freight and air-conditioned passenger trains just as robust internal accruals justify his urge to expand the network with 32 new trains and eight more Gharib Raths and upgrade services on existing ones without, as in the past, taxing the exchequer. Like the Union Budget, the Rail Budget too is no longer the sole arena in which policy is aired. Its "dynamic pricing" measures allow the Railways to effect price changes according to demand. This suggests a maturing of policy, and that finally is the current Rail Budget's takeaway.

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