Abolish Railway Budget Speech, Increase Parliamentary Oversight

Railway budget should be done away with but they should remain accountable to the House, writes Vivian Fernandes.

The annual railway budget speech has become an exercise for ministers to burnish their political image and dress themselves up as pro-people, at the cost of the institution they head. The Economic Survey and the Union Budget speech are important events in the economic calendar of the country. The latter is to India what its president’s State of the Union address is to the United States. Through association with these events, the railway budget speech gets its share of public glare, which it would not otherwise have. Two days before the Union Budget, for two hours past noon, the nation is a captive audience to the railway minister. It is their day under the sun.

Even responsible ministers have to make placatory announcements, yielding to the burden of expectations and pressure from lawmakers from their own and other parties. If they do not oblige they are accused of being elitist and uncaring.

They can, of course, make anxious statements about the poor financial health of the railways and the necessity of conserving resources for investment in projects, that are not only profitable but also serve the economy by moving goods and people at lower cost over long distances. Dinesh Trivedi of the Trinamool Congress chose the latter course on 14 March 2012.

The choice before me is either just to keep the system dragging or build a new, safe and modern, passenger and freight transportation system which would contribute at least 2 to 2.5% to the GDP of the nation as against less than 1% at present... I am glad to inform this august House... that I have chosen the latter.

Dinesh Trivedi, former Railway Minister

Budget as a Template for Populism

It was a choice, party leader Mamata Banerjee disapproved of. She got the party’s official spokesperson to denounce him in TV debates that followed. Trivedi was forced to quit even before the budget came up for discussion and voting in Parliament.

As railway minister, Banerjee herself followed the precedent set by most of her predecessors. Not that she needed a template for populism. Just as Tata Steel once advertised, ‘We also make steel,’ the business of freight haulage was peripheral to her vision. Here are excerpts from her 3 July 2009 speech:

Railway is the visible face of the government... [S]tanding before the august House, please permit me to raise a question as to whether railway projects are to be measured only on the scale of ‘economic viability’ or do we also need to look at the ‘social viability’ of these projects? Are the fruits of development to be restricted only to a privileged few and not to the teeming populations in remote and backward areas of our country?

Mamata Banerjee, former Railway Minister, 3 July 2009

Budget Speeches Don’t Ensure Accountability

Banerjee saw the railways as a state within a state. She allowed it to spill all over. Among her many announcements were six nursing colleges to be set up on railway land, indoor stadia, medical colleges and the revival of printing presses.

For ministers like Banerjee, the budget is a prop for their grand self-image, rather than an effort to mould public opinion against wasteful spending for the long-term good of the railways.

Despite the attention, railway budget speeches do not ensure accountability to Parliament. In his 2008 speech, Lalu Prasad declared that toilets in all 36,000 coaches would go green and there would be no discharge of untreated faecal matter by 2012. But in February 2015, Suresh Prabhu announced that only 17,388 toilets had been converted.

The same is the case with accounting reforms. They will be work-in-progress eternally if left to railway mandarins.

Making the Railways More Professional

• Niti Aayog’s suggestion of doing away with the exercise of presenting the railway budget is worth following since it has become a populist tool.
  
• Railway budget is being used by leaders to project a pro-people image, with announcements trying to appease the public.
  
• Despite the attention that railway budget garners, the budget speeches don’t ensure accountability of any kind on the announcements made.
  
• Very little attention is given to the accounting reforms, an exercise that may help understand why the Railways is not a profit-making enterprise.
  
• Merely discarding the railway budget speech may also not help since it will make the working of the railway board more opaque.
  

Restructure the Railways

In ‘Bankruptcy to Billions’, a book about the turnaround of the railways during the tenure of Lalu Prasad, his Officer on Special Duty and author, Sudhir Kumar, says only 20 percent of the total capital investment of the railways have political implications and the rest can be apolitically made. Kumar says he got a free hand to play around with freight rates – charging a higher rate on iron ore for exports, which was hugely in demand from China, or carrying higher axle loads, so long as he respected the political mandate of no privatisation, no retrenchment and no sleeper class fare hike. 

Prasad wanted an image makeover, after a disastrous run as Chief Minister of Bihar.

But merely doing away with the annual budget speech will not help. Without whatever little scrutiny there is, the Railway Board might become more unaccountable than it already is.  Most of the board members just care about turf and preserving the monopoly of the railways. They do not realise that the monopoly also creates an obligation: to provide low-cost locomotion to the economy and efficient, high-speed passengers services at competitive fares.

The railways will have to be restructured into a truly commercial enterprise, with social obligations paid for from the general budget. Concurrently, the annual speech should be abolished. Suresh Prabhu’s last two railway budget speeches have been sober. He should deny future minsters an opportunity to yield to the temptation of grandstanding.

(Vivian Fernandes is editor of www.smartindianagriculture.in but takes a keen interest in matters of railways)

Also read:

Railway Budget: A Saga Of Glib Talk And Hollow Promises