Populist tinkering now, vision later

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New Delhi: The flamboyance of former railway minister Lalu Prasad gave way to a rather conservative Rail Budget 2009-10 presented by UPA’s new railway minister Mamata Mamata, who decided to continue with most of Prasad’s policies but clipped the freight loading to a more realistic target of less than 6% over that achieved in 2008-09.

For 2009-10, Mamata has estimated her cash balance will be 26.5% lower at Rs 14,201.27 crore. Accordingly, in her first Rail Budget presented under the UPA on Friday, she has decided to be prudent on the financial front, eschewing the lure of cutting passenger fares. She also left freight rates untouched. But she has managed to fulfill her earlier promise of providing monthly season tickets of Rs 25 to those with a monthly income of less than Rs 1,500—called izzat—along with announcing fare concessions to students and youth while promising on-board infotainment on the Rajdhanis and Shatabdis.

Her largesse has been concentrated on West Bengal. She has extracted a series of projects for the state, including a new locomotive unit, a coach factory and another 1,000 MW power plant to supply dedicated electricity to the Railways; the first one was set up by Lalu Prasad in his home state Bihar.

Amrit Pandurangi, executive director of PricewaterhouseCoopers, said the budget lacked vision. “She has done little wrong, but very little right too. There is no sense of direction in the budget.”

The major plans announced in the budget include that of developing world-class stations (50 of them), multi-functional complexes, logistics parks, freight terminals and a cold chain, all of which will be through the public-private partnership route. Pandurangi said the plan for world-class stations was a sound idea that has been hanging fire for the last two years. “They need to sort out the problems in attracting bids. Just an announcement is not enough”, he said.

The arithmetic of the budget depends heavily on a massive dose of borrowings by its financing arm IRFC, of Rs 9,170 crore. This is Rs 5,000 crore more than that for 2008-09. To make them sail through, she has made Pranab Mukherjee revive the tax-free status for the papers. She has also cut down the funds for investment—the capital fund by Rs 4,300 crore.