Monday, March 19, 2012

[ZESTCaste] Rail Budget–mismanages finance, eyes dalit vote bank

Rail Budget–mismanages finance, eyes dalit vote bank
18 Mar. 2012 11:29 PM IST

The Railway Budget is the last nail on the democratic aspirations. It
is a clever ploy of bureaucratising the process and depriving the
political leadership of any role in decision-making. It is an
inflationary budget with an eye to cater to dalit vote banks in
preparation for the next general elections by employing one lakh
dalits in the next one year.
Every bit of it, including not providing copy of the financial
statements, to the media is an effort at concealing facts. The reason
given was printed copies are not available and it has been loaded on
the internet. It was not easily accessible there also. It raises a
question – is there more to conceal than reveal? This is what the
railways have been doing since Laloo Prasad Yadav was its minister. He
showed a surplus which was not there.
Now to justify steepest increase in fares it is trying to show a loss
of Rs 3000 crore – shown as loan by the minister "to balance my
budget" despite the claim of higher passenger earnings during the last
two years. It is not true to state that the railways have not
increased fares for the last eight years. They have been continuously
increasing on the ploy of readjusting fares through one or other
formula. They increased fares in the name of safety and development
cess as well.
Passenger earnings in 2010-11 were Rs 25,792.62 crore. This was higher
than the earnings of 2009-10 by 2,378.18 calculated at Rs 23,488
crore. The railways claim that in 2009-10 also it earned more than the
previous year. It has been so every year since 2000-01.
If that is so the rationale presented by railway minister Dinesh
Trivedi looks unconvincing. On an average he has increased fares by 12
to 24 per cent. His process of fixing fares at the minimum of Rs 5 on
the plea that small coins are not available also exposes the
inefficiency of the government.
He also tried to substantially increase the fares to the nearest Rs
5, which in many cases is to the farthest Rs 5, would earn the
railways about Rs 7,000 crore extra, says chairman of railway board
Vinai Mittal.
The minister says that his gross traffic receipts – from freight and
passengers – in 2012-13 would be Rs 103,917 crore short by Rs 2322
crore than his budget estimates. But it is more than his earnings of
the two previous years as passenger traffic is continuously
increasing. He also states that passenger traffic is set to grow by
another 5.4 per cent in 2012-13. It means even at the existing fares
the earnings would increase by at least 6 per cent, about Rs 18,00
Does that justify his steps to increase the fares? It means from fares
alone the railways are set to earn about Rs 8800 crore more. If he is
at a loss, how and why he has decided to pay a dividend of Rs 6,676
core to the government. The ministry is also receiving a grant of Rs
24,000 crore from the government against its demand of Rs 45,000
crore. It is quixotic.
It only means that the railways have messed up their finances to the
tune of about Rs 27,000 crore (Rs 24,000 crore budgetary support and
Rs 3,000 crore loss). If market borrowing of Rs 15,000 core and public
private partnership (PPP) of Rs 1050 crore are included it would go up
to rs 43,000 crore.
The railways would be run on commercial principles, a number of
previous railway ministers had averred. When it comes to levying of
fares and freight, the principle is adhered to in its most
exploitative manner. But its expenses are not managed on those
principles. A loss-making enterprise is supposed to curtail its
hiring. But the railway minister there makes a political statement –
he would employ one lakh more – above 80,000 appointed in 2010-11 -
and would also wipe off the "backlog" of SC/ST and other categories.
Then he also makes a brazen statement, "I have taken the railways out
of ICU".
A patient coming out of ICU is not expected to take any strain – as
this political extravaganza for catering to the supposed vote bank
would cause. Is it a preparation for the next Lok Sabha elections?
All the same he tries to close options of his successors on deciding
on the fare component. The freight component has already been taken
out of their purview by the decision of Laloo Yadav to introduce
dynamic freight structure. Freight revision is a round-the-year
non-budgetary process.
Trivedi has now suggested the same for fare revision as well by
proposing to introduce a dynamic structure for FAC – fuel adjustment
component and set up a fare regulatory authority. The authority would
serve two purposes. Primarily it would reemploy retired bureaucrats,
as wisdom is supposed to lie only with them, and secondarily the fare
management would be decided irrationally as is done by all other
regulatory authorities be it in the area of electricity or insurance.
The political head of the ministry effectively would be subservient to
the bureaucracy. It exemplifies the lack of political wisdom of the
present rulers. Europe and the US are having severe financial problems
as their economies were mismanaged by the bureaucrats and the
politicians, under IMF-World Bank mandate, decided to hand over their
powers to the officials.
The railway budget is a testimony of implanting those follies here. If
the west has failed on this score, it is difficult to fathom how India
could succeed. Trinamool Congress supremo Mamata Banerjee has rightly
decided to sack the railway minister and called for redo of the
railway budget.


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