Do We Really Need a Separate Budget for the Railways?

Wednesday, July 09, 2014
Railway Minister Sadananda Gowda arrives at Parliament to table the budget (photo: Reuters)

The dust has settled on the maiden rail budget of the Modi administration. It is a bold move away from the populism of the past few years to a more measured realistic look at providing a cleaner, safer and more tech-savvy Indian Railways.

But do we need a separate annual railway budget? This hangover of the British Raj – a separate railway budget was tabled for the first time in 1927 – made sense when 40 per cent of the government’s expenditure went on the train network. 87 years later, this is a mere 4 per cent.

Yet we are still treated to a political spectacle every year, with the Railway Minister having to somehow balance cheaper fares for passengers with finding funds for modernizing the crumbling track infrastructure, along with drawing new trains out of his proverbial hat to keep all constituents happy.

Thankfully the Modi administration has put its foot down and stopped pandering to personal fiefdoms, unlike the days of former ministers Lalu Prasad Yadav and Mamata Banerjee who only seemed to be interested in launching trains for Bihar and West Bengal respectively as though the rest of the country didn’t exist.

Prime Minister Narendra Modi made it clear in a televised address on Tuesday that the Railways would become a growth engine for the whole country, not a few states. The horizon is clearly not just the next election, but long-term to clean up the financial and operational mess left by the previous UPA administration.

The new Railway Minister Sadananda Gowda has done a commendable job, even announcing plans to open up India’s huge but congested network to overseas investors.

Yet we would like to go further and ask: Why does there have to be a Railway Ministry in the first place? The time has surely come for the Indian Railways to cease being a political platform for handing out largesse – remember the UPA’s Mallikarjun Kharge who dished out Rs. 47 lakh ($78,000) to his personal staff before departing? – and become a professionally managed firm.

No developed country has a separate Railway Ministry. Of the three countries with a train network larger than India’s – USA, Russia and China – only China has a Railway Minister. If you consider that China’s former minister Liu Zhijun was sentenced to death in 2013 for bribery and abuse of power, you can see why no country should keep a separate ministry for running its train network. Keep the Indian Railways state-owned for sure, but stop using it as a political cash cow.

The Modi administration should take its modern vision for the Railways one step further and bring in a professional CEO to run it. And let him run it quietly without the annual drama of the railway budget in Parliament.

- Karan Singh


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