All the mudslinging apart, the decision heralds economic wisdom and a strong will. The Railways is crucial to India’s economy, but incurs an annual loss of Rs 29,000 crore on passenger services alone. The current hike in passenger and freight fares only helps cut that down by 11,000 crore, which still leaves the government to chip in the rest of the burden.
Moreover, the Railway budget mentions a few new projects every year, but a look at those announced previously suggests a majority of those never get to see the light of day. Figures from March 31 2011 are a case in point. There were 347 pipeline projects at the time, including laying new routes and lines, electrification, doubling up and gauge expansion.
The arrears on those added up to US$25 billion, while the proceeding 2012-13 budget only set aside US$2.2 billion. As a result, most of those projects are left hanging in the air.
The Railways has often bore the brunt on safety and services. While the burden on services has grown overwhelmingly, net revenues have been offset by rising infrastructure and fuel prices. The only sustainable recourse to prevent the Railways slipping into a severe slump was pumping in funds and restoring its financial health.
N.K Singh concedes these reforms may leave the man on the street with some questions, but in due time, the answers will be right there on the table.