Improving Finances and Security Are Key Themes of Railway Budget

Raveendran/Agence France-Presse â€" Getty Images Railway Minister Pawan Kumar Bansal, center, before presenting the Railway Budget in Parliament on Tuesday.

In the railways budget for the next financial year, India’s rail minister, Pawan Kumar Bansal, deftly sidestepped the sensitive topic of fare increases by proposing surcharges that are not likely to affect the poor.

India’s 65,000-kilometer (40,000-mile) rail network, which carries seven billion passengers a year, is financially strapped, overburdened, unsafe and often decrepit, but increasing fares to make the railways financially sustainable has always been politically unpopular. In March 2012, the railways minister at the time, Dinesh Trivedi, proposed raising fares and was immediately dismissed from his position by West Bengal’s chief minister, Mamata Banerjee.

The lack of political support kept railways ministers from increasing passenger fares across the board from 2004 until January of this year, when Mr. Bansal announced an across-the-board increase in railway passenger fares of 10 to 25 percent, aiming to generate approximately $1.2 billion in one year for the financially strained railway system.

On Tuesday, Mr. Bansal managed to raise more revenue for the railways in the budget he presented in Parliament, without resorting to additional fare increases. Instead, he announced a series of in! creases to other charges, like reservations for upper-class carriages and for fast trains.

This means the price that most people, particularly the wealthy, will pay to ride the trains will go up. Meanwhile, freight charges were increased by 5 percent.

In a speech peppered with poetry, Mr. Bansal focused on financial sustainability and the need for “a paradigm shift in policies.”

Satish Misra, a senior fellow in politics and governance at the Observer Research Foundation in Mumbai, said Mr. Bansal was savvy in how he handled the delicate task of generating revenue for the railways.

“In this era of coalition politics for the last 15 years, the railways ministry has been used as a tool of compromises, milked for the limited interest of political parties,” he said. “But Mr. Bansal has maneuvered the situation being conscious of political ramifications and increased things in an indirect fashion, keeping in mind the interest of the poor.”

Highlights of Mr. Bansal’s fist budget speech are below:

• “The growth of the railways is inextricably linked with the growth of the country,” he began. (Read the full speech here.)
• Improving the financial picture was a major theme. “The Indian railways must be made financially sustainable,” he said. “A big challenge has been the scarcity of resources.” Losses to railways on account of passengers who pay less than it costs to move them grew to 246 billion rupees ($4.6 billion) in 2012-13, from 225 billion rupees in 2011-12.
• Mr. Bansal said that the railways must provide value for money for all customers, adding, “Railway passengers deserve safe and comfortable travel.”
• On the recent fatal stampede at Allahabad Station that killed more than two-dozen people, Mr. Bansa! l said, â! €œWe will strive to work towards a zero accident station.”
• The railways will strive to ensure better security for women and more female security personnel. The railways would also set up security hotlines for women.
• The railways are going high-tech, he said, with a “more efficient and people-sensitive railway system” and plans to add free Wi-Fi, a new e-ticketing system and e-ticketing through mobile phones.
• The Indian railways will partner with the Unique Identification Authority of India for bookings and passenger validation.
• In this fiscal year, the Indian Railways are set to join China, Russia and the United States in carrying one billion tons of freight annually.
• There will be a five percent increase in freight fares and a marginal increase in tatkal, or last-minute, reservations, super-fast trains and cancellation charges.
• This coming year, the ministry plans to invest 633 billion rupees, including 6 billion rupees from public-private partnerships./li>
• Indian Railways will introduce 67 new express trains and 27 new passenger trains.