Sustaining the reform track

As the saying goes, “Well begun is half done”. And minister for railways Suresh Prabhu’s first Rail Budget was a clear indication of the pragmatic path he was going to follow in order to lead the 1.4 million strong behemoth to early financial recovery.

Making the train journey of an average passenger a more pleasant and comfortable experience, starting with ease of booking a ticket, providing clean bed linen for overnight journeys, giving him/her a choice of meal, and finally to enable him/her to reach safely and in time, was one of Mr Prabhu’s priorities.

In view of the substantial inputs made in the area of passenger facilities, perhaps time is now ripe for valued customers to shell out more. Hopefully the proposed railway regulator will address the issue of the long overdue tariff hike. Crucial for reducing freight subsidy to passenger services, it would prevent further increase in freight tariff which has resulted in the railways losing business over the years to the road sector.

The recent derailment of four coaches of Bengaluru-bound Island Express at Natrampalli in Vellore district of Tamil Nadu, followed by 3 coaches of Awadh-Assam express derailing at Mirapur on Muzaffarpur-Hajipur section has exposed a deficiency in the level and quality of inputs in the vital area of safety. A more proactive approach, such as carrying out an extensive safety audit by an external agency, may be considered.

In addition, nearly 11,000 unmanned level crossings still remain potential safety hazards for road users for which trials of a number of automatic warning systems have been on for some time now. Hopefully,

Mr Prabhu would be in a position to reveal details of long-term inputs, including the all important time frame in which he proposes to overcome this vexatious problem.

Punctuality of passenger trains is still around 83 per cent. Though capacity augmentation of high density corridors may somewhat help to improve this, Mr Prabhu may have to take some innovative steps such as introducing a system to make up time at intermediate stations.

The projected Rs 85 crore increment over the previous year’s freight earnings as mentioned in the last budget may not materialise, and new areas of revenue have to be aggressively explored. An estimated Rs 1 lakh crore of parcel business and transport of high-value white goods is waiting to be tapped which can substantially boost the railways’ earnings.

Undoubtedly, Mr Prabhu will be putting his best team to design not only new parcel vans with twice the existing capacity giving the customer more bang for his bucks, but also some aggressive marketing to wean it away from the road sector. Export of locomotives, coaches, wheel sets, springs, diesel loco components, etc, from its state-of-the-art manufacturing facilities available at six production units which had been so far been channelised through Rail India Technical and Economic Service (RITES), is proposed to be put into high gear, with some aggressive marketing in order to shore up the railways’ bottom line.

Invitation to set up private freight terminals (PFT) has seen good response with almost 400 applications being received, of which 30 are already operational. Some more policy tweaking based on feedback from clients may be made to make it a run away success.

Staff costs are almost half the annual working expenses of Rs 1.62 lakh crore and, following the adage “Cut your coat to suit the cloth”, Mr Prabhu may try reducing it by proposing some innovative measures such as installing Last Vehicle Device — a common feature on all US railroads — to eliminate guards from goods trains, who could then be better utilised on new passenger trains as guards or as travelling ticket examiners (TTEs) to garner more revenue.

The Seventh Pay Commission’s award is going to set back the railways already stressed finances by a whopping Rs 32,000 crore. Reportedly, the ministry of finance is not inclined to agree to Mr Prabhu’s request to foot the bill, though it may ultimately agree to bail the railways out by partly funding with its windfall earnings from the proposed spectrum auctions.

In all probability, this year too, Mr Prabhu will stick to his tried and tested pragmatic approach, which may not please his political colleagues, but will ensure that the nation’s engine of economic growth, which he has been chosen to lead, stays on course to financial recovery!

The writer is former member of the Railway Board