Rolling along

One of the highlights of the Interim Budget speech was Piyush Goyal’s claim that 2018-19 had been the safest year in the history of the Indian Railways. In 2018-19 (April-November), major rail accidents fell to 44 from 51 in the corresponding period in the previous year. However, this should not detract from the fact that there have been repeated episodes of rail tracks being ruptured, and coaches and engines getting detached. The improvement in safety is perhaps also an outcome of an increase in capital outlays. Budgetary support for the Railways, at ₹64,587 crore for 2019-20, marks an increase over ₹53,060 crore in 2018-19 and ₹43,155 crore in 2017-18. For an organisation that transports over 20 million passengers a day, outlays on rolling stock, signalling and track renewal cannot suffer. The focus on stepping up recruitments is also welcome, coming as it does after the Kakodkar committee in 2011 observed that there were over two lakh vacancies in the Railways, of which a lakh pertained to safety alone. Likewise, it was estimated that till recently there were over 16,000 posts of loco pilots (engine drivers) waiting to be filled. Overworked drivers, or “human error”, are a major cause of mishaps. The first phase of fresh recruitment for over 1.31 lakh posts shall be initiated in February-March 2019. Over 50,000 employees retire each year.

The Railways’ essential role is to transport freight quickly and cheaply, and passengers reliably over long distances. It should emerge as the preferred mode for transportation (over road transport) of steel, cement and heavy material, for its fuel efficiency. It is just as well that inland waterways has made an entry into the transport mix. The projected spike in freight earnings in 2019-20 (with the ratio of passenger to freight earnings expected to change from 1:2 roughly to nearly 1:3) by over ₹13,000 crore to ₹1.43 lakh crore seems to suggest that policies that subsidise passenger fares at the expense of freight will continue to be reversed. Earnings from AC class account for a third of total passenger revenue of ₹52,000 crore for 2018-19.

It is also important that the Railways emerges as the preferred mode of travel for medium and long distance travel, as opposed to air and road transport, for reasons of fuel efficiency and environmental costs. Hence, fast and reliable trains are welcome along new routes, while augmenting capacity along existing ones. The Railways’ operating ratio (working expenses, excluding pensions, as a proportion of receipts), at 96.2 in 2018-19, is way over the targeted 92.8, and by all reckoning is likely to be a window-dressed figure. However, given the positive externalities of the Railways, it is important to look beyond this metric and consider pragmatic options such as PPPs to meet capex needs of about ₹1.5 lakh crore (revenue expenses are over ₹2.5 lakh crore). Broadly, the behemoth is on the right track.

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