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Political heavyweights have occupied the railway minister’s chair. Yet, they could not delink fare hike from the Railway Budget. How did you take this daring decision?
I do not term it a daring act, but an imperative one. The railways have to go to Parliament for appropriation, not for accrual. Fare is a fee charged for a service rendered and the Railways Act provides for it. One does not have to go to Parliament for this. It is a different matter that a package was always worked out on how money will be raised and spent. The money raised goes to the Consolidated Fund of India and to spend that you need parliamentary approval. But these two exercises can be altogether unrelated. I found the finances were in such a shape that we needed money immediately. I took the prime minister’s permission. For the first time, the railways had taken a loan of Rs 3,000 crore from the government and we had to repay it. Through the fare hike, we will get around Rs 1,300 cr benefit this year and Rs 6,600 cr additional revenue in 2013-14.
Wasn’t it a politically risky thing to do?
It has not proved to be risky. I have travelled in trains, and stopped at 12 stations, and have come across many people who told me that you could have raised the fare more. What they need is good service. When people know that fares in bus service in a state is three to four times higher, they understand.
How relevant will be the Railway Budget now?
Wait for it. You will find that it has not lost its relevance. Since 1920, railway finances have been separated.
From now, will a fare hike be outside the Budget? Will this function be passed on to the proposed rail tariff authority?
We could not have waited for the tariff authority to raise fares, though very soon we will go to the Cabinet for setting up a tariff authority. The purpose, to a large extent, is to depoliticise fares. The authority will see how the railways can run, what is the input cost, and the kind of fare that can be charged. Once a tariff authority is instituted, the government will look into recommendations of the authority.
How competitive will the freight rates be after the diesel price hike?
That is a challenge. To increase our share of freight business, more lines will have to be laid. We will link collieries and ports, and augment capacity.
How do you plan to fund these activities, considering that the railways’ record in public-private partnerships has not been good, and the past few years have been difficult?
The Cabinet has approved five participative models under which private investment can be attracted. The railways are holding an investor meeting on Saturday where we hope to attract investment. We will look at all forms of non-transport revenue that includes development of railway stations.
Are you seeking higher budgetary support?
Government money will always be needed. We would seek higher budgetary support. Considering the XII Plan outlay, we would need on an average gross budgetary support of Rs 40,000 crore. But that may not come. All our works will be affected but we have to prioritise our projects. For the dedicated freight corridors, the entailment will be Rs 95,000 crore. It is an important national project and only a small portion of this is through PPP. The JICA and World Bank funds will come as GBS.
