Profitable Railways indispensable to economic growth

Ashutosh Kumar Banerji | Updated on March 12, 2018 Published on March 18, 2012

The Railway Minister, Mr Dinesh Trivedi, has been able to convey to Parliament the anguish of the Railways in the persistent neglect of its infrastructure

This Budget has perhaps pulled the Railways out from the brink of financial disaster. It is so refreshing to see a pragmatic, non-ideological and non-populist budget.

Mr Dinesh Trivedi, in his brief stint as Railway Minister, has understood what ails the Indian Railways. Insufficient capacity to move freight and passengers, high cost of freight transportation, an unbalanced traffic mix that is choking the network, an unenviable safety performance and near-empty coffers are some of the major challenges facing the system.

Though he is not a political heavyweight, he is gifted with a sound business sense. In his maiden Budget speech he has clearly articulated that 8-9 per cent growth in the national economy is unlikely to be achieved unless the transport sector, principally the Railways, expands system capacity by at least 10 per cent. Pursuant to the objective, he has identified five core areas covering tracks, bridges, signalling, rolling stock, stations and terminals for focused attention and development.

The Railways has inherited a heavy shelf of pending projects with a throw-forward of Rs 1 lakh crore at current prices. In addition, various investments programmes suggested by the Kakodkar Committee, the Sam Pitroda Committee and the Railways Development Plans during the Twefth Plan period add up to a mammoth need of over Rs 14 lakh crore.

Generating such huge investments from internal resources of the Railways is impossible. The Minister has argued that if the Government proposes to invest $1 trillion on infrastructure, is it unreasonable for the Railways to expect at least 10 per cent of this amount for its development? Mr Trivedi pointed out that the performance of the Railways is intimately linked with the national economy and, therefore, its modernisation and addition of competitive teeth to its performance has to be shared by the Government, and cannot just be the responsibility of the Railways.


While expanding transport capacity, he has emphasised that zero tolerance towards accidents has to be made all pervasive within the organisation. Setting up of an independent railway safety authority, elimination of level crossings in the next five years and provision of train protection warning systems are some of the logical safety measures proposed in the Budget.

It is undoubtedly a development-oriented budget and accordingly, a slew of projects aimed at enhancing capacity and improving quality of passenger and freight services have been included. Coach-manufacturing facility in Kutch (Gujarat), Karnataka and Palakkad (Kerala) along with a loco-ancillary-manufacturing unit at Dankuni (West Bengal); adding muscles to the disaster-management capability; bringing in modern design concepts through association with the National Institute of Design at Ahmedabad; and Pradhan Mantri Rail Vikas Yojana, a long-term plan for investment of Rs 5 lakh crore are a few of such initiatives.

In addition, he has proposed rail connectivity to border areas; rail connectivity to Bangladesh and Nepal; manufacture of 9,000 horsepower and 12,000 horsepower A.C. electric locos along with 5,500 horsepower and 6,000 horsepower diesel locomotives; procurement of train sets for intercity service; increase in running of double-stack container trains and increasing the fleet of LHB coaches to eliminate the incidence of body and bogie separating and coaches climbing over each other; and improved house-keeping, cleanliness and sanitation at stations, trains and Railway premises are other measures aimed at giving facelifts to the Railways.

Business focus

The management of Railway stations at present is predominantly centred towards the kitchen affairs of the Railways and the prime space is allocated to the Railway Police Force, Government Railway Police, Railway Mail Service, ticket checkers, etc., leaving little space for passenger amenities. Placing it under an independent station development authority will result in a greater customer focus.

The Railway Board is proposed to be re-structured on business lines from the present departmental lines. This is a major initiative aimed at expediting decision-making and making the administration user-friendly. To make a beginning, two members, one looking after public-private partnership and marketing and another exclusively for safety are being added to the team.

While making a strong case for the entire community pitching in and mustering resources for the development of the Railways, he has chalked out a concurrent scheme for generating internal resources through commercial exploitation of railway land and air space.

New approach

In addition to a recent increase in fare tariff, he has proposed minor increases in passenger fares ranging from 2 paise a km in respect of suburban and unreserved class, to 3 paise for mail express, 5 paise for sleeper class, 10 paise for AC 3-tier, 15 paise for AC 2-tier and 30 paise for AC first class. These are reasonable, affordable and likely to be acceptable to the travelling public, especially in the context of no increase in fare for the last eight years.

Recognising that the fare and tariff on the Indian Railways often turn into an emotive issue and for no logical reason gets politicised, the Railway Minister in his Budget speech has proposed setting up of a Railway tariff regulatory authority. This will ensure fixing of tariff on rational basis with appropriate methods based on variation in input costs.

This Budget has ushered in a new approach. Mr Trivedi has been able to convey to Parliament the anguish of the Railways in the persistent neglect of this critical ingredient of the infrastructure and starving the system of its well-deserved support. This Budget has perhaps pulled the Railways out from the brink of financial disaster. It is so refreshing to see a pragmatic, non-ideological and non-populist budget.

Well done Mr Trivedi.

(The author is a former General Manager, Central Railway.)

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Published on March 18, 2012
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