Travellers must pay for railway services: Arun Jaitley

New Delhi: Asserting that the railways was facing competition from other modes of transport, the government on Tuesday said that the premier Indian transporter should resist populism as he pitched for some of its sectors, like hospitality, to be outsourced.

“Railways got caught in a battle where populism prevailed over performance and the basic principle on which any commercial establishment is to be run, the first essential principle is that consumers must pay for the services that they receive,” finance minister Arun Jaitley said.

Year after year, the success of the Railway Budget was measured by subsidising consumers and making populist announcements regarding trains, he said, adding that unless railways strengthen its performance and internal management system, they will lose out to competition from other sectors like highways and airlines in passenger and cargo transportation.

“The core competence of railways is really to drive trains, to provide those services. Hospitality may not be the core competence of the railways and, therefore, what is not within its core competence, the principle of outsourcing — which is accepted world over —can be a logical addition to those activities of railways,” Mr Jaitley said.

The government had in September scrapped the 92-year old practice of presenting a separate Railway Budget and decided to present a combined general and Railway Budget for 2017-18 on February 1, 2017.

The finance minister asked for the accounting systems of the Railways to be in proper order. “Your accounting systems really must reveal more instead of concealing the reality. What is the kind of investment in infrastructure that is coming in, what is the kind of investment in railway safety, what is the kind of outcome of outlay that you have planned, I think those accounts must really reflect the reality”.

Railway minister Suresh Prabhu said the accounting system was like the health card of an organisation which reflects its financial health.

“Accounting reforms is a massive project and not just confined to accounting conversion from cash to accrual accounting but it is an integrated project on management accounting, cost accounting and management information systems. The system should aim at linking the outlays to outputs and outcomes and should lead to accounting for accountability,” the railway minister said.