Populist Flailings
They could de-train an innovative rail budget, and much else besides
There can only be two takes on the storm raised by Mamata Banerjee over the railway budget presented by Union minister Dinesh Trivedi, who belongs to her own party. The first is that the fracas was orchestrated, so the Trinamool could play reformist and populist at the same time with an eye to courting two different constituencies. The second interpretation is even worse: Mamata genuinely opposes passenger fare hikes, a long-pending measure to raise resources for the cash-strapped national transporter and its much-needed modernisation. This would mean she’s inveterately populist – a position she, in misguided wisdom, associates with being pro-poor.
None of this augurs well for the upcoming general budget. There’ll be misgivings about Mamata playing to the gallery by bashing any reform the finance minister proposes in the budget. So, he might think it better to play safe than sorry. The upshot for the UPA is clear: Mamata as an ally has become a liability. On issues ranging from land acquisition revamp and the India-Bangladesh Teesta accord to multibrand retail FDI and the NCTC, she’d rather wreck coalition unity publicly than hold dialogue to resolve differences amicably. The railway budget controversy is merely the latest – and most absurd – example of her serial trouble-making. The UPA should begin to seek a replacement ally, in order to counter political instability at the national level.
Regardless of Trivedi’s fate as minister, he deserves credit for coming up with a bold and visionary budget. He sets an ambitious target on improving the operating ratio – percentage of expenditure to earnings – by almost 10 percentage points to 84.9% in 2012-13. He unveiled many smart plans, including establishment of a statutory railway safety authority, a railway research and development council to spur innovation, a body to target redevelopment of 100 stations through the PPP route on the pattern of new airports, as well as a logistics corporation to ensure last-mile delivery of freight traffic.
Trivedi does well to call for a body of experts and other stakeholders to study the need for an independent railway tariff regulatory authority to fix freight rates and passenger fares. Equally innovative is the proposal to link the fuel cost of passenger services to fuel prices, as is the case with airfares. The budget rightly focusses on improving passenger amenities, initiating moves to speed up trains and introducing a real-time train information system. However, there are many road bumps ahead, since funds for modernisation can’t be mobilised solely from freight and passenger fares. That’s a challenge the Railways will have to meet in innovative ways.
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