His reformist budget of 2012 may finally come through
Given how the BJP was quick to roll back the R700 crore hike in suburban railway fares in Mumbai due to elections in the state, there is no certainty railway minister DV Sadananda Gowda will be able to present a reformist budget later this week. Even so, it has to be recognised that, desirable as railway passenger fare hikes are since the organisation lost R26,000 crore on this in FY14, there is only so much that can be achieved from this. Last month’s fare hike, which unfortunately included the already over-burdened freight segment, will fetch the Railways around R9,000 crore as compared to its needs of at least R14 lakh crore, of which around R1 lakh crore is required immediately since, as the Kakodkar report brought out, both large sections of the tracks and coaches need replacing.
In such a situation, the Railways need a brand new play. A play that Dinesh Trivedi first introduced in his speech in March 2012, and which PM Narendra Modi reiterated in his speech while inaugurating the Katra-Udhampur rail link at Katra railway station last week. Trivedi, and the PM asked why railway stations couldn’t look like airports, with hotels, shopping malls and commercial complexes built around them. Indeed, since most railway stations in India are in the centre of town, the commercial value that can be garnered is probably several times more than what an airport can, given how far it is from the city. In an interaction with the Express Group before his maiden budget, Trivedi had pointed to how, in the case of Japan’s railways, 30% of revenues came from non-traffic services like hotels and catering. Which is why, apart from talking of setting up a Indian Railway Station Development Authority, Trivedi spoke of his plans to create a Member PPP in the Railway Board whose sole job would be to examine where private participation could be brought in, and to create the necessary enabling environment. While it is not clear whether Trivedi was sacked by his populist boss because of the proposed privatisation or the 10% hike in passenger fares—43% for some suburban trains like those in Mumbai—it remains true the railway bureaucracy has also been stalling privatisation attempts for years. The redevelopment of the New Delhi railway station into a 3-4 storey modern airport-type complex with shopping malls and restaurants and office spaces was put on hold after it was ready to be rolled out, and for years, bringing in private players into engine manufacturing has been put off on one pretext or another. Now that the PM has said private railway stations are feasible—on a separate note, the Railways have moved a Cabinet note asking for 100% FDI in the sector—it is to be hoped Dinesh Trivedi’s budget finally comes through.