Even for a railway budget, on Friday’s presentation in the Lok Sabha was ill-tempered. The first interruption came in less than 10 minutes, followed by several more, and had the minister shouting at full tilt.
That’s ironic, considering that Railway Minister Mamata Banerjee set out to please all – not just her vote bank (which, too, she did) but also those who rubbished her previous two budgets on the ground of weak financial planning.
“We have attempted to combine a strong economic focus ... with a human face,” Banerjee said. A careful look at the numbers will make even the diehard Banerjee baiter concede that there is some truth to her claim.
Perhaps seeking to address a wider audience than her bastion of West Bengal, where many have already declared her the winner in the coming assembly elections, she switched to Hindi early on. Also, the early part of her speech was mainly about Jammu & Kashmir, the North-East, Kerala, etc.
Her first mention of West Bengal triggered a prolonged disruption of the Lok Sabha, with Sharad Yadav reading out a list of unfinished projects. True, many of the projects announced in the past are far from complete, but the key numbers raise the hope that the railways could be getting back on track.
Banerjee may have crossed the hump of the recent years, induced in part by the Pay Commission arrears, during which the railways’ surplus was nearly wiped out – it was a mere Rs 75 lakh in 2009-10, compared with Rs 4,456 crore in the previous year. It is back at a healthy Rs 4,104 crore in the current financial year and projected to swell to Rs 5,258 crore in the next.
The operating ratio, the key parameter of efficiency, had risen to 95.3 in 2009-10 from 90.5 in 2008-09. Since a higher number represents lower efficiency, it gave Banerjee’s critics a big stick to beat her with. This number has improved to 92.1 in the current financial year and is projected to get better at 91.1 next year.
On Friday’s budget also provides more – 39 per cent more – for the annual plan at Rs 57,630 crore.
Banerjee hopes to achieve these improvements without raising passenger fares or freight charges. Clearly, she has an ally in the Union government, which has agreed to increase the gross budgetary support by 25 per cent to Rs 20,000 crore. An identical amount comes as borrowings, half of it through issue of tax-free bonds. This doubles the railways’ annual borrowing.
For the first time, Banerjee is taking recourse to funding through public-private partnerships, which are projected to bring in Rs 1,700 crore.
In spite of a gung-ho Economic Survey, also tabled in Parliament on Friday, which projects 9 per cent growth in the gross domestic product, Banerjee is projecting freight growth of no more than 6.4 per cent to 993 million tonnes. Freight revenue, though, is projected to rise almost 10 per cent. This indicates that freight rationalisation will yield more and bridge the gap between the growth in volume and value.
This budget also has growth initiatives: Two wagon-making units in conjunction with private parties, a 700-Mw captive power plant, 1,300 kilometres of new rail lines and purchase of 18,000 new wagons. As many as 16,000 ex-servicemen will be recruited, an announcement made right after Banerjee intoned Lata Mangeshkar’s ai mere watan ke logon.
All said, Banerjee is banking on growth, government support and debt to get out of a tight situation. The railways’ internal resource mobilisation is projected to decline from Rs 14,523 crore to Rs 14, 219 crore.
