It was Bibek Debroy panel on the restructuring of Indian Railways, which talked about scrapping the Rail Budget first. Now that it appears to be happening from 2017-18, it is no surprise that Debroy, who is member NITI Aayog, is closely associated with the whole process.
In an exclusive interview to Santosh Tiwari of The Financial Express, Debroy said that the reforms suggested by the committee in effect meant that the practice of presenting a separate Rail Budget in Parliament had to go.
But, to do it successfully, there are several issues to be dealt with. Most important, among them would be handling the social cost of running the railways, which has kept the passenger fares low and freight rates high.
According to Debroy, the end of Rail Budget in real sense would also require rationalization of fares. The job of suggesting changes in the rail fares will be of the proposed rail regulator.
“The passenger fares are too low and the freight rates are too high, so some amount of rationalisation is bound to happen and the Railways have also not utilized the non-fare revenue possibilities. Passengers are willing to pay more, provided the services improve,” said Debroy.
He added that a committee is currently looking at the social cost of the railways and it is expected that the rail regulator will suggest a mechanism for sharing of the railways’ subsidies.
Debroy is also associated with the government proposal for changing the financial year, but he said this is not going to happen from 2017-18.