Railway Budget 2014 -15, Plumbing New Ground
By S. Sivathasan -July 10, 2014
S. Sivathasan
“Muscles of Iron and Nerves of Steel”. Oft repeated quote from Swami Vivekananda, whom Modi reveres. His quotes are believed to tingle in every drop of the Prime Minister’s blood. If his fortitude is immovable the Railway will pierce through the decades old malaise at high speed.
India has had a stand-alone budget for 90 years from 1924. Yes it stood alone for budgetary purposes, but leaned heavily on the national budget for support. It sustained losses and gloated about its CHEAP SERVICE. Indian Railway carried 75% of passengers and 90% of freight at one time. Now it is 20% and 40%. The railway cannot carry a single passenger more since it carries 4 times the number of passengerscompared to China which handles the second highest in the world. The image shown below exhibits available capacity.
More adversely, every additional passenger creates a loss of 23 cents per passenger km. It was 10 cents per km 12 years back. The dilemma is; more it carries more it loses. The surplus from freight is only a few coins more. Herein lay the crux of the problem and no government had the mind to crack it.
In both segments deficiencies are glaring. Wagons run beyond capacity and tracks are above saturation point. Inanimate transport of passengers and inadequate capacity for freight. With every budget, the railway minister prates about his achievement that fares are not raised. The overplayed rhetoric was that passenger fares were kept below costs. This feat heaped a burden on the exchequer and passenger subsidy in 2013/14 was Rs 260 billion. The NDA government with increases in May reduced the subsidy by a third.
