Despite the shortfall in loading in the current year the yield from the recent passenger fare hike had been eaten away by the hike in energy costs he has been able to bring down the operating ratio to 88.8%, with the promise of reducing it further by a percentage point next year.
An encouraging feature is that he is planning to get the fund balances up at the level of R30,000 crore at the end of the 12th Five Year Plan. The Fuel Adjustment Component, to be implemented from the next year, may be necessary to meet the rising energy charges, but can have an adverse effect on the freight rates, encouraging diversion of traffic to other modes.
Measures for adopting higher technology for e-ticketing and providing WiFi facilities and, so on, are welcome features. Safety enhancement measures, green initiatives, women RPF companies. facilities and cleanliness at selected stations and, so on, are all welcome features.
There is a proposal to set up a Debt Service Fund; the need for this is not clear. The Rail Tariff Regulatory Authority under discussion does not appeal to me as a welcome step. I would have welcomed the setting up of a Fare and Freight Enquiry Committee, the last of which reported two decades back.
All the same, a permanent cell for examining the adequacy or otherwise of the pricing of services is also necessary. It is encouraging to note that progress is being made on the dedicated freight corridors. These need to be progressed ass fast as possible, since the restoring the financial health of the railways will, to a very large extent, depend on their being brought intoo operation.
In conclusion, I would urge upon the railways to get a National Railway Policy adopted by the government, so that the management can be within the framework of such a policy rather than on the whims and fancies of the incumbent board or minister.
Railways deserves congratulation for coming up with a pragmatic budget, feasible in the present context.
The writer is a former finance commissioner of railways