Tuesday, September 13, 2011

Will Railways go the Air India way?

The populist measures of netas like Mr Lalu Prasad
and his illustrious successor Ms Mamata Banerjee for refusing to
increase railway fares for last 8 years have contributed immensely to
the financial woes of the Railways. After the parliamentary
consultative committee and railwaymen’s federation, the finance
ministry has reportedly now directed the Railways to reconcile to
augmentation of resources by increasing fares.
“There is apprehension that sustained financial crisis in railways
owing to huge subsidies doled out to passengers could lead to bigger
crisis. We can be the next Air India,” said a senior official
referring to the national carrier crisis wherein even salaries of the
employees were affected.
It is this precarious situation which made All India Railwaymen
Federation general secretary Mr Shiva Gopal Mishra recently write to
the new railway minister Mr Dinesh Trivedi, “to increase passenger
fare or ask the government of India to at least compensate the amount
the Indian Railways spends on passenger subsidy”.
“….non-rationalizing of fare will be quite unfair with the Indian
Railways,” Mr Mishra’s missive said.

Even last year a whopping amount of Rs 20,000 has been drained out on
the subsidy for passengers and is only likely to increase this year.
The rail fares were increased marginally by the then minister Mr
Nitish Kumar in 2002 and under Mr Lalu Parasad during UPA-I, the
populism only led to slashing down of fares at least thrice.
In 2002-03, during Vajpayee era, fares were last hiked minimum for
second-class mail and express trains went up from Rs 15 to Rs 16.
Not to forget, Mr Lalu Prasad’s petline used to be that there’s no
need for fare hike as railways were making profit --- which ultimately
has been proved only as “jugglery’ of figures by none other than the
CAG and also Ms Mamata Banerjee.
Slamming Lalu’s alleged jugglery of figures, the CAG lamented that the
balance sheet prepared by railways “had not followed the generally
accepted principles” of commercial accounting in presenting fixed
assets, investments, and contingent liabilities.
“…. the revenue for the year (Lalu’s stint) remained overstated and
current liabilities stand understated," the CAG had said.

However, under Ms Banerjee, who was always obsessed about Bengal
polls, also refused to take a more practical step and never gave a nod
for raising the fares – at times even against the wishes of the Prime
Minister Dr Manmohan Singh and the Finance Minister Mr Pranab
Even her Man Friday, Mr Dinesh Trivedi, the present imcumbent,
initially remained non committal for increasing fares.
Even on July 14, 2011 at his first media conference after taking over
the railway ministry, Mr Trivedi virtually had ruled out fare hike
saying, “increasing fare in the name of augmenting resources is the
easiest option” and cited rather other options.
However, the railway board is now reportedly pushing for mid-term
passengers fare hike by about 8 per cent to tide oer the crisis.
The All India Railwaymen Federation, to start with, has mooted the
proposal to link the fare hike to fuel process suggesting that
“reduction in fuel prices” could lead to reduction in fuel surcharge
for passengers also.

(The piece was used in The Statesman)

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