Will Trivedi put the Railways back on track?
Funds crunch is a major challenge confronting the Railways and the hike in freight rates, the first major exercise at mobilising internal resources, comes as a respite. But that does not address the core issue fully.
Even if Railway Minister Dinesh Trivedi increases the passenger fares in the budget for 2012-13 to be presented today (Wednesday), much of the money raised would go to meet the expenses of repair and maintenance of the tracks and rolling stock and covering the depreciation costs that have almost been neglected ever since the commencement of the second innings of the UPA-II with Mamata Banerjee at the helm of the Railway Ministry.
The Railway Board is quite aware that much of its efforts would be devoted to solving the problems that have accumulated over last three years. In its perception, more time is needed to chalk out the path of development and the overall growth of the railways.
The prime reason for the abrupt hike in freight rates — hardly a week before the budget presentation —is to balance the current budget and prevent the account books from getting into deep red.
In any case, it would help project a healthy revenue side with the hike expected to yield about Rs. 20,000 crore. But much of this would go to meet the ordinary working expenses which are mounting beyond the expectations of the Railway Board.
The government's budgetary support is expected to be not more than Rs. 5,000 crore, giving little scope for truly augmenting the railways network in terms of capacity, speed or safety, which will be on the priority shelf.
The inability to evolve a public private partnership (PPP) model is afflicting the growth path. Ms. Banerjee failed in her effort and concentrated more on West Bengal than on issues confronting the Railways — Kolkata, and not Rail Bhavan, was her headquarters. The Railway Board was r ered ineffective and she sought the help of “outsiders” who did not deliver at all.
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