Colombo Telegraph

Railway Budget 2014 -15, Plumbing New Ground

By S. Sivathasan

S. Sivathasan

“Muscles of Iron and Nerves of Steel”. Oft repeated quote from Swami Vivekananda, whom Modi reveres. His quotes are believed to tingle in every drop of the Prime Minister’s blood. If his fortitude is immovable  the Railway will pierce through the decades old malaise at high speed.

India has had a stand-alone budget for 90 years from 1924. Yes it stood alone for budgetary purposes, but leaned heavily on the national budget for support. It sustained losses and gloated about its CHEAP SERVICE. Indian Railway carried 75% of passengers and 90% of freight at one time. Now  it is 20% and 40%. The railway cannot carry a single passenger more since it carries 4 times the number of passengers compared to China which handles the second highest in the world. The image shown below exhibits available capacity.

More adversely, every additional passenger creates a loss of 23 cents per passenger km. It was 10 cents per km 12 years back. The dilemma is; more it carries more it loses. The surplus from freight is only a few coins more. Herein lay the crux of the problem and no government had the mind to crack it.

In both segments deficiencies are glaring. Wagons run beyond capacity and tracks are above saturation point.  Inanimate transport of passengers and inadequate capacity for freight. With every budget, the railway minister prates about his achievement that fares are not raised. The overplayed rhetoric was that passenger fares were kept below costs. This feat heaped a burden on the exchequer and passenger subsidy in 2013/14 was Rs 260 billion. The NDA government with increases in May reduced the subsidy by a third.

In this context ASSOCHAM an industry chamber abandoning all pretense to so called realism has proposed an infusion up to $3 Trillion in the next 15 years to the railway. The Chamber sees it as a way to gearing India for a $7 Trillion economy by 2030. Quite pragmatically, HSR and Freight Corridors together with all appurtenant works feature high in these bomb blast proposals.

In Railways independent India to date achieved on average 187 km per year. Cheap fares couldn’t have achieved anything more. The British had delivered 546 km per annum between 1853 and 1947. India now has a challenge with High Speed Railway. China has set the pace by delivering 13,000 km of HSR in the last 20 years. In the next six years delivery will average 2,400 km per year. More famously China has notched the highest speed of 483 kmp/h.

High Speed, FDI and PPP

For once rail transport is being thrown open to fresh fields of endeavour – Infusion of capital both foreign and local external to state resources. Much of it is envisaged for HSR and Dedicated Freight Corridors. A guestimate as of now for the Diamond Quadrilateral to connect up the principal metros is Rs 9 trillion. The first HSR is Mumbai – Ahmedabad at Rs 600 billion and it will be path breaking.

Plumbing New Ground

Rulers of democratic India lived in dread of the ruled, the demos. Electoral prudence suggested that fares shall not be touched and they were not touched. The demos paid the price by getting transported with all comforts and human dignity lost in the process.

To capitalist India, socialist pretensions – from ‘Socialistic pattern of society’ days 1955 to now – demanded that FDI be purged from one’s economic philosophy and vetoed from political vocabulary. It was faithfully followed.

Together with it was PPP – Public Private Partnership – along with the corollaries of BOT, BOOT etc. which remained taboo for so long. They were seldom adopted particularly in major state undertakings like railways.

Profligate frivolity miscalled welfare dissipated the nation’s resources denying the people investment in their future. FDI was one way of marshalling external funds. It was however spurned because no patriot can allow Mother India to be manacled and kept down by foreign money power. Nor can an Indian permit the rampage of Multi-National Corporations in independent India. We prefer to die below the poverty line than to live above it was the supposed credo of the leftist oriented. Despite such a philosophy, India recorded some progress.

A benign destiny has divined that these shackles be blasted. Modi is the man of destiny to lead the way to the promised land. In one clean swipe he has removed much of medieval lumber from the path of the Indian Railway. Hopes are now raised for Railway modernization in the coming years.

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