Scrap the rail budget

Ahead of the rail budget, most people’s attention invariably centres on how much it would cost them to travel on the Indian Railways for the next year. Business, in contrast, is interested in computing the additional costs they would now have to bear on account of an increase in freight charges and how they can pass it on to their customers. Of course, all this will become known once the Union minister for railways stands up to present the rail budget in a few days’ time — just before the Union budget — a tradition that goes back to the days of the British Raj. Yet, if you looked at the issue a little closer, rail budgets rarely go beyond such limited issues — okay, there may also be sundry sidelights like additional services, which interests a smaller group of people, normally only those belonging to the minister’s constituency! In other words, rail budgets serve no larger purpose. They lack a long-term vision in keeping with the status of the Indian Railways as the world’s largest employer. This is because budgets have come to become political ledger books used by the incumbent government to balance popular and unpopular decisions on how to run the service for the next fiscal.

There have been, of course, some small attempts to bring the railways in touch with the real world. Last year’s rail budget of Nitish Kumar saw a break with some old traditions. For instance, passenger tariffs were hiked and freight tariff rationalised, keeping in mind the competition posed by the ever-expanding road sector. However, reading the messages that have so far emanated from Rail Bhavan, it would appear that this year’s budget will have distinctly populist overtones, what with elections just over a year away. This does not augur well, either for the financial health of the railways or its future.

We need, therefore, to re-examine the entire rationale of having a rail budget in the first place. In these days of reform, when the focus is on the corporatisation and professionalisation of institutions, the Indian Railways too should be run like a corporate entity, with complete autonomy from political interests. If the aviation sector can be run without an annual budget, why can’t the Indian Railways? Air travel clearly changed for the better after private players were allowed into the sector. There is no reason why the railways cannot follow suit. It’s time, then, to scrap the rail budget altogether, and follow it up with a process of corporatisation aimed at making rail services in this country not just more efficient but more economically viable. But is the political dispensation prepared for this change of track? That is the tricky question.