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Railway "miracle" comes a cropper
By Shivaji Sarkar - Lalu excludes market borrowings of Rs 8030 crore.
- Tatkal operations earn Rs 5000 crore.
- Foodgrains, fertilizers and essential commodities rates were increased 12 days before the presentation of Railway budget.
- 72 per cent of plan investment to come from extra-budgetary sourcesborrowing!
- The accounting procedures followed by the Indian Railways need a scrutiny.
Railways hardly have any surplus. Manipulations of figures present a "miracle". Lalu's budget is away from truth. His statement that fares and freight have not been raised is definitely not the fact. Tariff on foodgrain and essential commodities was raised on February 1, just 12 days before the presentation of the budget
Lalu's railway goes on increasing fares and freight round the year without either sanction or information to Parliament. Railway budget apparently has become a mockery. If there is at all a surplus it is because of unethical practices. It also raises a question whether administratively railways are capable of changing tariff and fare structure. The practice is seemingly also a breach of parliamentary privilege.
If the railways turnover is real then it raises a question Is the captain efficient or was the Railway Board team inefficient? Chairman of the Board SS Khurana said, "It is a difficult question and I would prefer not to answer it." Shri Khurana does not elaborate on "his" success either.
The budgeting process requires a thorough scrutiny. There are definitely manipulations in presentation at least. Lalu's accounting jugglery does not include market borrowings of Rs 8030 crore. It reduces his stated this year's surplus from Rs 13,431 crore to a mere Rs 5,041 crore. Borrowings were taken by Indian Railway Finance Corporation and Rail Vikas Nigam. Is the railway on Satyam path?
His populist announcements are mostly not passed on to the people but its hog limelight in the media. Even last year's fare cuts except to ordinary second class passengers have not been passed on. This year's 2 per cent fare cut effective in next financial year is subject to review when full budget is presented after Lok Sabha elections. This needs an exposure.
Random changes in freight tariff and Tatkal operations, rates of return ticket bookings and internet ticketing, which do not have parliamentary sanction, have been fleecing the rail users.
Over 5 per cent of accruals, Rs 5000 crore have been earned from Tatkal, selling railway berths at a huge premium, said Member (Traffic) Sri Prakash soon after the presentation of the budget. Tatkal operations do not have parliamentary sanction and is considered the worst and most unethical business practice. Before the presentation of budget last year Tatkal charges were Rs 250 at the highest level. It was surreptitiously increased to Rs 300.
Passengers are not only charged Rs 300 for each upper class and Rs 100 for each sleeper class berths but they are also made to pay a fare from the train's originating station to the terminating point. If one buys Tatkal ticket from Delhi to Patna and train terminates at Guwahati, he pays full fare upto Guwahati and the railways sells the same berth again from Patna.
Now in many cases passengers are forced to buy Tatkal tickets30 per cent berths are reserved for itas many people get only waitlisted tickets even if they purchase tickets almost 30 days in advance. Railways earn Rs 40 for cancellation of each such ticket as well. But if it is Tatkal ticket and one cancels the journey railways do not return a penny.
Similarly, freight tariff is continuously changed without parliamentary sanctions. The axle load (the weight of load a wagon can carry) too has been dangerously increased to make it revenue-grossser. The railways has been continuously tinkering with freight pricing for the last five years.
Freight tariff on crucial foodgrain, essential commodities and chemical manures was increased just 12 days before the railway budget by the Rates Circular No 03 of 2009. So Lalu's budget speech does not raise tariff! In railway parlance, it is called, a new jugglery, "amendments made in general classification of goods". Lalu does not care that his measures hike food and fertilizer prices and burdens the farmer and common man.
Senior railway officials say that Lalu always had fantastic figures in mind and did not work out a sustaining pricing policy. "The real impact of the freight regime put in place by Lalu would be known in the coming years," an official says.
It is likely to be so. Railways as per budget statements have scrapped provisions for wagon investment scheme of Rs 500 crore. It means bringing down investment on manufacturing of wagons. Would it mean railways are heading for a crisis?
Lalu announced Rs 21,578 crore as surplus in his 2007-08 budget too. The reality is "the excess for 2006-07 amounts to less than half at Rs 10,206 crore" as given in the detailed Explanatory Memorandum of the budget. Accordingly, there was Rs 416 crore reduced net revenue in 2007-08.
What has Lalu given to the passengers in previous years? Precious little. Even 4 per cent cut in fares on sleeper class fare and 8 per cent cut in AC-3 tier and chair car announced in 2007-08 budget has not been passed on to the passengers. There was a clause that it would be effected after the introduction new LHB coaches. Since not many sleeper coacheswith 81 berths, AC 3 tier coaches with 72 berths and Chair car with 102 seatswere added, the then chairman Railway Board KC Jena announced, soon after presentation of the budget last year, the benefit could not be given. The scheme of such coaches has now been scrapped.
In 2008-09, his announcement of 7 per cent cut on AC I, 4 per cent on AC 2 tier fare were also not so real and lacked transparency. The rider, Lalu said, was, "This reduction will be only 50 per cent for popular trains and during peak period". This is not defined.
This raises a serious question. Are the railway profits for real? Lalu maintained a studied silence even during the reply to the debate last year. The accounting procedures followed by the Indian Railways need a scrutiny. The budgeting process is not for populist purposes. It had been introduced to ensure that transparency and accountability remains in spending public money. Lalu's budget lacks it.
(The writer is senior economic and political journalist and ex-Sr. Editor of The Financial Express.
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