It is hard to comprehend why the rail budget was merged with the general budget this time around and this practice would be followed henceforth. Surely, there must have been conventional logic in the time-honoured convention of having a separate rail budget, which has been given the go-by. One explanation given is that unlike British times when railways accounted for 85 per cent of the country’s budgetary allocation, now it is a mere 15 per cent. Railways minister Suresh Prabhu contends that he had written to finance minister Arun Jaitley in August with this suggestion “in the long term interest of the national transporter as well as the country’s economy.” Is the government fighting shy of the intense scrutiny that the rail budget came under when it was separate? Now, it will be like any other wing of the government. The spotlight would be gone and this may be a welcome respite for the government. The tendency of rail ministers to favour their own states with new lines and connectivity would perhaps be less acute and that is a welcome change. But it is uncertain how the merger would work for the country on balance.
The thrust of the 2017-18 rail budget is on improving rail safety, pushing digital transactions, listing rail public sector units on stock markets and setting fares competing with other modes of transportation. These could well have been the same if the rail budget had been separate. A rail safety fund, named ‘Rail Sanraksha Kosh’, with a corpus of Rs. 1 lakh crore, is proposed to be set up over a period of five years, Jaitley announced in the budget speech. The finance minister also announced the waiver of service charge on e-tickets booked through Indian Railway Catering and Tourism Corporation (IRCTC). Earlier, the IRCTC used to levy a service charge of Rs 20 on sleeper class and Rs 40 on AC class e-tickets. The service charge waiver may hit the Indian Railways’ revenues by Rs 2 crore a day. However, the IRCTC will be able to raise money from the market as a plan to list the railway PSU on stock markets. Along with the IRCTC, the Indian Railway Finance Corporation and Ircon will also be listed on stock markets.
Railway tariff would be fixed based on social obligation cost and competitiveness with other transport modes. With some air fares under-cutting rail fares, there would perhaps be merit in a flexible approach in fixing fares. The finances of the Indian Railways could also benefit from the fact that Railways will not be required to pay annual dividend of around Rs 9,000 crore to the finance ministry which was a drain on its resources in the past. It is heartening that 500 railway stations would be made differently-abled friendly by providing lifts and escalators. The Union government would frame a new Metro Rail Policy with focus on “innovative models of implementation and financing, as well as standardisation and indigenisation of hardware and software.” All in all, these are worthy steps but why the Railways should move away from greater public scrutiny is beyond understanding.
