Railway Minister Nitish Kumar had to toil hard to garner support for an apparently controversial Railway Budget for 2003-04. He had several discussions with Prime Minister Atal Bihari Vajpayee, Deputy Prime Minister L K Advani and Finance Minister Jaswant Singh before finalising the budget proposals.
Though seemingly populist, the budget proposes to partly corporatise the railways. Six railway production units were likely to be corporatised in the near future, a government functionary said.
Government sources admitted that Kumar's idea of rationalising and lowering passenger fares and freight initially worried the prime minister and the finance minister. However, a persuasive Kumar convinced them that the railways would be able to pull through without hiking fares or freight by attracting more passengers and goods traffic. "This assumption is based on the ground realities," Kumar said after the Budget.
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Kumar's proposal to grant "independent cost and profit centre" status to six railway production units, employing over 100,000 people, is being seen as a step towards corporatisation of these units. This has been a longstanding demand of a pro-reforms section within the government. "These units will be allowed to export without any hindrance," Kumar said.
With 10 states going to polls this year, senior leaders in the government were more than pleased when the railway minister informed them that there was no proposal to increase passenger fares. He instead proposed to carry out accounting reforms to estimate the subsidy provided to passengers.
Kumar, however, denied that he had taken into account political considerations while formulating the Railway Budget. "This is absurd because no one casts votes on the basis of rail fares," he said.
But sources close to him said the minister decided well in advance to let politics dominate economics in the railway budget.