In the last few years, the Indian Railways (IR), with a distinguished lineage of over 170 years, have undergone devastating root-and-branch changes in policy, organisation and operations, most of which defy logic and reasoning. A bizarre ‘Mohammed bin Tughlaqi’ obsession to do things out-of-the-box has resulted in the carpet-bombing of time-tested systems that have sustained IR for decades. One such – the subsuming of the Railway budget into the General budget in 2017 – has got to be among the more illogical decisions of a foolhardy government.
Even before Independence, there was the definitive conviction that to effectively perform its ordained role as the country’s prime transportation mode and propellant of economic growth, the Railways needed to be independent, nimble-footed in decision-making and insulated from the rigid bureaucratic practices that typify governmental functioning. IR was slotted as a commercial entity and the funds allocated to the Railways were seen as a loan in perpetuity for which dividend was paid on the capital invested by the government.
But in one fell blow, IR was divested of its financial autonomy and independent functioning by merging the Railway budget with the Union budget. The payment of dividend was abolished and the Railways demoted in status and treated like any other government department.
Was there a method in the madness? Was the jettisoning of the Railway budget a deliberate subterfuge to cover up the faltering performance of the Narendra Modi government in 2014-16 after all its tall promises? And to dilute accountability and do as it pleases without any public scrutiny? Mind you, the Railway budget was an open book that enabled the members of parliament to oversee the financial performance and other aspects of railway working in detail.
Also read: Budget 2025 Must Ensure Higher Investment in Agriculture and Rural Development
Annual appraisal reports on safety, finance and projects were presented to parliament and the harried railway minister was constantly in the eye of the storm, explaining and defending railway performance. All that oversight is in the past. Now the Railways is a part-time job for its minister. And members of parliament remain blissfully ignorant or uncaring of the havoc being wreaked on the Railways.
The Railways’ financial autonomy has ended but so has the hitherto intensive public scrutiny of its finances. Camouflaged within the humongous General budget, the Railways’ profligacy is now unchecked, because of which the premier transportation organisation has turned loss-making since 2016 despite massive injection of funds, unremitting traffic demand and unprecedented industrial peace.
The profligacy and wastage are stunning. A prime example of an unaccountable railway management going berserk is the reckless spending on frenetic electrification of the entire broad-gauge system without proper cost-benefit analysis, a costly prodigality that has aptly been termed “the demonetisation moment” by an anguished colleague, the late Ravi Babu. The most serious fallout of this ill-conceived project is that thousands of diesel locomotives and their extensive support infrastructure, including a state-of-the-art diesel shed commissioned in 2017 have become infructuous or require conversion to electric, another exorbitant exercise.
There is little doubt that the scrapping of the Railway budget and the consequent absence of public surveillance, have adversely affected safety which continues to be compromised due to the neglect of core areas such as the maintenance and replacement of worn-out assets, timely replenishment of safety category staff, modernising safety infrastructure, and narrowing the unholy gap between precept and practice. It should worry the Railway management that even today, if the railway staff decide to “work to rule”, the system will grind to a halt. The massive infusion of contract labour has resulted in acute shortage of skilled manpower in the technical maintenance categories, further impacting safety.
Also read: Budget 2025: ‘MGNREGA Is Essential for the Economy, Govt Shouldn’t Use it in Opportunistic Ways’
With hardly any monitoring of the allocations for safety, it is no surprise that the allotment of funds to the critical Depreciation Reserve Fund (DRF) which is used for replenishing operating assets, have been steadily dwindling from a level of over Rs 8,000 crore in 2013-14 to a mere Rs 200 crore in 2020-21 and finally to zero in 2021-22. This cavalier attitude towards budgeting for safety is happening at a time when, as per CAG estimates, assets worth Rs 95,000 crore were due for replacement up to 2020-21.
This government has clearly lost sight of IR’s corporate mission “to provide safe, affordable, customer-focussed and environmentally sustainable transportation.” An example of the uncaring elitist mindset of this regime is the appalling fact that in a country where over 90% of people can afford to travel only second class, this regime’s preponderant focus on Vande Bharat and air-conditioned services has resulted in the Indian Railways carrying one billion – yes, one billion – fewer passengers in the second class, non-suburban segment in the year 2022-23 as compared to 2011-12. A brutal capitalistic ethic reigns behind the veneer of sab ka saath, sabka vishwas.
All in all, the scrapping of the separate Railway budget has been an unmitigated disaster.
Mathew John is a former civil servant.
This piece was first published on The India Cable – a premium newsletter from The Wire & Galileo Ideas – and has been updated and republished here. To subscribe to The India Cable, click here.
