Mamata Banerjee may have chugged off to Writers? Building from Rail Bhawan, but she does not seem to have taken the baggage of populist mismanagement with her, judging from the Prime Minister?s non-critical non-review of the non-performance of Indian Railways on June 1. He is reported to have exhorted the railways to complete projects on time, improve their safety record and provide better amenities. In management jargon, these are called motherhood statements: everybody is for it, but they don?t provide a clue to coping with specific problems of motherhood!
Without a doubt, the railways are the most archaic part of Indian infrastructure, caught in a time-warp of over half a century and utterly reluctant or unable to get out of it. Time was we waited interminably to get a brand new car, choice of two, of 25-year-old vintage models. We drove on crowded narrow highways, taking forever to reach destinations. We could mostly not get on a flight, had choice of one airline, and braved airports little better than moffusil bus shelters. Rajdhanis were our ?fast? luxury trains, never mind the stations reeking of cesspools.
We now have a choice among many models of cars, some of them quite contemporary in global terms, to suit all budgets and we are wooed by competitive sellers. A sprinkling of expressways and many four-lane highways make driving faster and more pleasant. We have some spanking new airport terminals and a host of brash new airlines, which cost more but get us there. And we still have the Rajdhanis and stinking stations. In fact, many of these prestigious trains now run a lot slower and are often delayed thanks to a manifold increase in the number of trains crisscrossing the same network in a bewildering array of routes.
In the 1970s, our rail network of over 60,000 km, the second largest in the world, was larger than China?s. Our trains were even better than those of China. The Chinese have since expanded their rail lines to over 91,000 km, expected to be 1,10,000 km in 2012. This includes over 8,000 km of dedicated high-speed corridors and the high altitude line to Lhasa, completed in record time. We have no bullet trains and our Kashmir Valley rail link has dragged on for decades, with no completion date in sight.
Later this year, a bullet train will cover the 1,350 km between Beijing and Shanghai in just four-and-a-half hours. Our fastest trains, the Mumbai Rajdhani and the Amritsar Shatabdi, take exactly the same time to cover less than a third of that distance, 400 km! Mamata Banerjee?s ?innovation? of non-stop point-to-point trains, the Duronto expresses, take about seven-and-a-half hours to cover 600 km, the same time I take to go from Vadodara to Jodhpur for the same distance by car, with many a stop on the way!
The reason for the decline of Indian Railways stares us in the face: lack of investment. The current budget has an annual plan outlay of R57,000 crore ($13 bn) for all purposes, including building hotels, acquiring rolling stock, and incidentally, building and improving tracks. Between 2006 and 2010, China spent $292 bn ($59 bn annually, or 4.5 times the Indian investment for all purposes) on rail tracks alone. Our neighbour obviously puts its mountain of foreign currency to good use, in contrast to our investment of pitiful internal accruals and stingy budgetary support.
Our cities are littered with crumbling once-grand edifices. The owners, shackled by laws barring rent increases or termination of tenancies, neglect the structures completely. Successive Indian railway ministers have followed self-imposed populist embargos on fare hikes and compulsions of adding ever more passenger trains from anywhere to anywhere in the country. All of them have honoured the hoary practice of cross-subsidising loss-making passenger traffic from freight revenues. It does not take rocket science to conclude that the creaky network is on the verge of a collapse.
A part of the problem is the organisation structure of the railways. It is the only department of the government that has its own budget outside the general one, a situation unique to India. Until the 1980s, the railways did not even reckon depreciation as a cost, using a sinking fund instead. As a department, the railways cannot raise funds from the markets, something they circumvent by the device of a finance corporation. In a clever bit of accounting, the railways sell the equipment they manufacture to the corporation, booking the full price as current revenue and lease it back immediately, showing annual rentals as current costs. Most manufacturing facilities are not corporate entities and not subject to prudent monitoring and control procedures.
The overriding objective of the railways would be to provide safe, fast and economic transportation of people and goods. Most previous ministers paid only lip service to this but went about catering to the interests of their states or constituencies. Nitish Kumar is the only recent minister who accorded much needed attention to the cash cow of freight movement. His initiatives paid off during Lalu Prasad?s tenure. Lalu still had no qualms in cooking the books to proclaim the railways a shining success story.
Mamata Banerjee thought such an interpretation of the railways? mission was for the simple-minded. Her priorities were to set up captive units (including for water bottling), budget hotels, shelters for the homeless, schools, sports academies, employing ex-servicemen, and just incidentally, freight movement. If the already precarious railway finances were further bled in the process, the all-encompassing social viability would justify that! Her economist prime minister hailed her budget as being for the common man, and has now offered placebos for the many ills of the railways.
Banerjee said that the railways were the artery of a pulsating nation. What she failed mention was that the artery is clogged with fat accumulated through unmindful and continued consumption of junk thinking. A bypass from Rail Bhawan to Writers? Building, alas, may not avert a cardiac arrest.
The author has taught at IIM-A and helped set up IRMA