Thursday, February 28, 2008

Critical analysis of railway budget needed

Lalu Prasad Yadav is known more for an undistinguished rule of Bihar, the dismal state he left Bihar behind and for a slew of corruption cases against him. The state under his governance registered the lowest level of human development indices in every sphere from literacy to infant mortality. Surprisingly the very same person as an union railway minister is lauded for successfully presenting four budgets so far without treading on anybody's toes or upsetting the feelings of aam admi with his token reductions. According to news reports he has boosted the revenues of railways substantially and has brought in new processes and products. What is it that he has done something novel to succeed where many illustrious ministers before him could not ? Is it that the current high growth in the economy is aiding railways in augmenting its revenues and enabling him to cut across the board the passenger fares even while petroleum ministry has to struggle to get even a token increase by Rs 2 for oil? After all railways and oil ministries are limbs under the same union government. While one can afford to be profligate, the other is unable to raise the prices even where they are compelling and more than justified. One is driven to the irresistible conclusion that the entire exercise is driven by electoral considerations and not on any economic wisdom when one considers the areas where railways are lagging behind.Evidently the railway minister is able to build the revenues of railways, despite the reduction of the fares and increasing trains even when the passenger traffic is a losing proposition, by cross subsidizing from the earnings on cargo freight. The latter has gone up phenomenally thanks to the economic growth allowing the minister such a luxury of cutting passenger fares even to higher classes of travel who hardly need such concessions from the minister.People should ask whether there is a let down in upgrading infrastructure like annual repairs and maintenance of old lines and building of new tracks. Is sufficient resources earmarked for adequate replacement and renewal of wagons and coaches and also modernizing the cargo operations? Is the minister making adequate provisions for mind boggling pension and PF liabilities? These are the areas that the cognoscenti should discuss in the dailies. The officials cannot obviously talk about such matters. Though the Rs. 25,000 crore surplus seems suspect, it is hardly sufficient to meet the huge capital requirements without allocations from the central kitty.One feels there should be a critical and in depth special audit by eminent firm of independent auditors to bring out impartially the issues that are generally not spoken about while presenting the budget. The audit by C&AG however good it is suffers from long delay becoming historical in nature. The finance ministry (not the railway ministry) should be empowered to choose the auditor.

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