India's poll-eve railway budget spares passengers

The Indian government on Jan. 30 decided against hiking railway passenger
fares and freight rates for fiscal 2004-05 in a what has been dubbed by the
opposition as an election-year budget.

Presenting a vote-on-account, or interim railway budget, for 2004-05, Railway Minister Nitish Kumar also announced the launch of 18 new non-stop trains to link all state capitals with New Delhi.

He kept passenger fares at the previous levels across all segments despite
lower-than-target earnings, apparently in view of the upcoming general election to be held by April.

Kumar said train reservations through mobile telephones would also be introduced and information about delayed departure would be made available
through SMS to passengers travelling on the Rajdhani and Shatabdi Express
trains.

The government unveils its annual railway budget every year towards the end
of February, ahead of the annual financial budget. In view of early elections, the government will not be able to announce a detailed railway and financial budgets.

Kumar's passenger-friendly budget, however, received flak from experts who
said India needed to raise railway passenger fares and freight rates to keep the mammoth network chugging along.

"It (the interim budget) clearly shows that the government is not willing to take any step that can disturb their electoral prospects," said T.K. Bhaumik, a senior economist with the Confederation of Indian Industry (CII).

"Railway passenger fare is something that directly affects a vast part of India's population. So the government is clearly not in a mood to face the ire of voters by increasing fares, though it puts pressure on finances," Bhaumik said.

Railway Board chairman R.K. Singh, however, justified the decision to keep
fares untouched, saying interim budgets usually did not contain any
proposal to increase freight and passenger fares.

Despite not raising the tariff, Singh said, "the railways are in a comfortable position as our receipts are in excess of our ordinary expenditure through various prudent cost-cutting measures."

Singh was non-committal on whether a tariff review would be in offing when
the full budget is presented after the general elections when the new government takes charge.

Spread over 63,000-route kms, the state-run Indian Railways carries 14 million passengers and operates 14,000 trains daily, making it the world’s largest railway system under a single management.

Kumar said 18 new trains modelled on the luxury Rajdhani Express trains would be introduced to connect state capitals with New Delhi. The new trains will have value-added features like "non-stop run beyond the state from where it originates, dedicated staff throughout the run and a public address system," he said.

The first of this series, the Karnataka Sampark Kranti Express from New Delhi to Bangalore was to be flagged off on Feb. 8.

Experts, however, say the focus of the interim railway budget should have been on improving the operations of existing trains and offering better quality of service to passengers.

"In the wake of a series of train accidents and a spurt in criminal activities on trains, one would have thought the Railway Ministry would put its house in order first before adding more trains," said a former railway official. "The new trains will only add to the already clogged network and create more management problems," he added.

In his speech, Kumar promised that his ministry would strive to bring down rail accidents to "near-zero level" in five years with increased investment on new technology. He also announced a hike in the outlay for implementing safety mechanisms from Rs. 23.11 billion to Rs. 23.51 billion.

A string of accidents badly rocked Indian Railways last year, claiming scores of lives. Officials admit that many derailments, averaging one a day, never get reported because there is no human casualty.

Kumar said all safety devices would be installed on trains and the rail network to prevent accidents due to bad weather and other causes --- with the aim of bringing down accidents to near-zero levels in five years.

Indian Railways has earmarked a budget for Rs.134.25 billion for 2004-05 for
launching a slew of modernisation initiatives and new trains and increasing investment in safety mechanisms.