Railway budget: Mr Economics never votes, do populists know?

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A Congress minister presented the railway budget for the first time in 17 years. This is significant for the grand old party is leading the ruling coalition at the Centre for nearly a decade now. The simple statistics establishes a simple fact: A crucial part of the nation's economy, in fact one of its mainstays, has mostly been sacrificed at the altar of selfish coalition politics.

The situation was allowed to drift day after day till the time came when the economic pillar was found to be nearing its collapse. The Congress railway minister, Pawan Kumar Bansal, had no other way but to present a budget that could best suit the reality. The absurd flight of the Indian Railways is no more possible, it was proved.

There is no scope of criticising Bansal for an indirect fare hike or direct freight rate increase. His predecessors, hailing from regional parties, had already prepared Tuesday's script long time ago.

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Trinamool says it's a revengeful budget

The Trinamool Congress (TMC), as expected, said Bansal's railway budget was a revengeful one for it had cut down funds for the Kolkata-based Metro rail projects and also did not approve much projects for West Bengal.

The Congress has taken a right step, but what was it doing all these years?

Minister of state for the Railways Adhir Ranjan Chowdhury, a politician from Bengal, rubbished such claim and said the current budget approved projects that look feasible on the ground and did not build castles on the air.
He snubbed the TMC (which had three successive railway ministers since the UPA II took office) for only making false promises and not actually doing anything for the people. He said unlike many other state governments, the Bengal government was not co-operating in taking forward railway projects. He said it was the Centre which had revived hopes for the East-West Metro project in Kolkata.

But the question is: Why did the Congress leaders keep shut all these years? Just like it has shown some urgency on economic questions recently, why didn't take up the cause of the railways' plight?

Some other Opposition leaders in West Bengal also mocked the way the railways was run during the days of Mamata Banerjee and her successors. "The railways worked on sports, health services, education and so many other issues. It was difficult to understand whether they were running the railways or the entire nation," one leader ridiculed.

The fact that populist railway ministers like the Lalu Prasads and Mamatas had sent the railways , what TMC's another railway minister Dinesh Trivedi rightly uttered, to the intensive care unit. Trivedi was punished for trying to take a realist road to revive the railways and was sidelined by Banerjee. The entire country looked with disbelief how coalition politics overshadowed the national interest. Bansal took the same route and succeeded because he and his party had no coalition compulsions.

Is it too late for the railways to turn around?

But is it too late for the railways to turn around? Economists are divided on the latest budget with some questioning its social welfare aspect while others backing it.

Economists divided on the question of public welfare

One economist said the process of increasing passenger fare (through reservation and cancellation charges and tatkal services) was objectionable for through the concept of fuel surcharge, the railways was actually linking itself with the market forces for fuel has been decontrolled.

According to him, it would take a toll on poor people. He suggested that the ministry should have a regulatory authority in controlling the fare pricing mechanism.

Another economist, however, countered him saying the railways could not afford to remain pro-poor through populism and had to abide by rule of economics. He said if the railways was run properly, then automatically the poor could be served but if only unrealistic targets were set, the entire railways would remain poor and nobody would gain. He drew the analogy of the Titanic, saying if there was a leak in the vessel, then it would be disaster for all.

Sources in the Congress also countered the first economist saying a mechanism to control pricing would be affected by coalition politics and lead to confusion and chaos.

Railway experts are extremely worried

Railway experts have expressed concern over excessive cross subsidization (Rs 24,000 crore) by increasing freight charges to keep passenger fare unchanged could cause the railway to lose revenues. For too much hike in freight charges was already leading to a decrease in transportation of bulk items like cement. They said the operating ratio of the railways has been reduced by 7 per cent mainly because of increasing the freight charges by 20 per cent but otherwise, it is getting difficult to ensure a better functioning of the mammoth industry. Market borrowing is another option of providing oxygen to the railways but that too has been huge (Rs 15,000 crore).

Hopeless promises churned out year after year by selfish politicians through ways of misutilising a key economic sector like the railways have actually pushed the situation to such an extreme that one day we could see voices for privatizing the railways getting stronger. The paradox is that it is the so-called pro-poor political forces who would be responsible for such a reverse outcome. It is just like the situation in the case of fuel where years of subsidization to help the poor is actually creating the situation extremely difficult for the poor.

Economics has its cruel ways, politicians are secondary

Economics don't salute crazy politicians. Welfare state doesn't work on the whims of politicians who don't have them in it to understand the intricacies of the science called economics. The case of railways is showing how our pathetic regard for economics is leaving us nowhere. When every other aspect of the economy is getting dearer, it is completely foolish to treat the railways in a vacuum and forcefully try to make it serve the moderate sections. The result will be just the opposite.

Our mindless politicians have perfectly scripted a suicide recipe for the railways in particular and economy in general.

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