Railways Losing Steam

Updated: Jan 31 2004, 05:30am hrs
With general elections round the corner, the interim Railway Budget for the year 2004-05 was fairly predictable that is, the railway minister Nitish Kumar would announce some populist, consumer-friendly schemes and would not announce any changes in the tariff structure. And the minister did just that. However, the interim budget need not be seen as a vision statement. Even as a statement of fact it is interesting since it shows the precarious position of the railways today. The revised estimates of gross traffic receipts for 2003-04 show a shortfall of Rs 890 crore against the budget estimate of Rs 42,605 crore. This is on account of a shortfall in both goods earnings as well as total passenger earnings. While the revised estimates for goods earnings show a shortfall of Rs 700 crore, the shortfall in total passenger earnings is Rs 160 crore. What is more worrying is the fact that the shortfall in passenger earnings is more pronounced in the second class segment. The shortfall in this bread and butter segment is close to Rs 250 crore while the earnings from the upper class segment have surpassed estimates by around Rs 89 crore. These are clear signs that the railways is losing its traffic to competition from roads and air.

It is here that schemes such as Sampark Kranti Express and Remote Area Rail Sampark Yojana are aimed at retaining as well as regaining passenger traffic. While introduction of flexi-pricing may have worked to an extent (for the upper class), the success of the new schemes is dependent on how the aviation industry reacts over the coming months. If that is the worry on the passenger front, there are no clear indications as to how the government plans to augment its earnings from freight. Clearly, figures from the interim budget tell us that the government does not have a well thought-out strategy of taking on competition from both road and air. With railways still being a vastly popular means of transport, they need to set the tempo. The current defensive approach adopted by Rail Bhawan needs to be converted into aggressive, corporate-type planning. Some public sector companies have shown this attitude in the past and the railways need to be run that way. The new government that comes into power after the elections, therefore, has a clearly defined agenda.