Saturday, July 12, 2014

#RailBudget: Where's the Plan Holiday?

Last week, Railways Minister Sadananda Gowda presented the BJP Government's maiden Rail Budget. In India, it is a legacy of colonial rule that allows the Railways Ministry to present its own budget, while the Union Budget covers the rest of the government. This is because, back in the colonial days and for several decades after Independence, the Railways controlled a large part of GDP, towering over other ministries. That is no longer the case, with the Railways contributing to less than 1% of GDP. Thus, there is an excellent case for abolishing this system and simply including the Railways Ministry in the general budget.

Anyway, that's wishful thinking. For now, we have the Indian Railways, the fourth largest in the world, a government-run monopoly that everybody hates and loves simultaneously, and which is in deep trouble. As the Minister rightly pointed out, it has become commonplace to make announcements and never implement them. Both UPA Governments combined announced 99 new schemes and implemented just 1 of them - no statistic better sums up why the UPA lost so miserably in May. Particularly under Mamata Banerjee, the Railways has been in steep decline, with virtually no new lines, train derailments, falling revenues and increasing subsidies. This was unsustainable and that is what this budget, thankfully, pointed out.

A great positive point about this budget is that it was not region-centric, as the Railways had become under Nitish Kumar, Lalu Yadav, CP Joshi and in particular Mamata Banerjee. By equally distributing its resources and showing special interest in developing the neglected Northeast, this is truly a national budget, a great beginning. Overall, the budget rightly used its few resources as well as it could, declaring FDI in Railways and laying the ground for the next stage of High Speed Rail in India, starting with the Mumbai-Ahmedabad corridor.

However, while the Minister proposed a Plan Holiday to get down to implementing broken promises made by his predecessor, he could not resist announcing as many as 58 new trains in addition to the ones his predecessors left behind for him. Some Holiday! This inherent contradiction was a major let-down but overall, this budget was a decent beginning for this Government, which has a guaranteed five years in power with an absolute majority of its own. 

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