The Hindu : Social service obligations a burden, says Railways

Online edition of India's National Newspaper
Friday, May 17, 2002

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Social service obligations a burden, says Railways

By Our Special Correspondent

NEW DELHI MAY 16. The Railways today released a comprehensive status paper — the third during Nitish Kumar's two-phased tenure — which deliberates on recent developments as well as unresolved issues.

``We are no longer at the crossroads. The present status paper tries to focus on updating the status paper of 1998,'' observed Mr. Kumar. But most of the issues, especially those relating to income and expenditure, have been plaguing the Railways for several decades. In the meantime, some more disturbing ones such as the hesitancy by States to meet their obligations have cropped up. The paper has raised some vital questions to generate wide debate and, hopefully, evolve a consensus in answering them. For example, it wants to know whether social projects should be fully funded by the Central Government and operational losses fully compensated. Or should the railways continue to bear the social service obligations at the cost of mounting safety-related arrears and constricted growth?

The question is being asked against the backdrop of the Railways being forced to annually pay thousands of crores as social service obligations.

A related issue for debate is whether the country can afford stifling economic growth because of high rail freight rates and the heavy cross-subsidisation from this sector to offset the losses from the passenger segment. The huge financial cost for meeting the rising pension payments is another subject for debate. Pension payout today stands at one-seventh of total income and is slated to increase. ``These statistics clearly demonstrate that the present system of pension payment is not sustainable.''

Taking up the case of the Konkan Railway Corporation (KRC), a joint venture between several States and the Railways, the paper points out that KRC has very high debt and the liability worked out to Rs. 744 crores in the last fiscal and Rs. 543 crores this year. ``Should Indian Railways alone meet the debt liabilities ? Should not participating States also share them,'' the status paper wants to know.

Taking up the middle-class dream of super-fast trains, its points out that the subject requires wide debate. ``IR has already identified Mumbai-Ahmedabad corridor for a study. Such projects require funds to the tune of Rs. 20,000 crores to Rs. 30,000 crores. Clearly IR cannot fund such projects from its own resources. Should such projects be taken up at all ? Who should fund it ? Should this segment of passenger business be deregulated.''

Most of the subjects are perennial. But the paper also accommodates issues inspired by the Rakesh Mohan committee on restructuring of the Railways. For instance, the paper has sought advice on corporatising the production units. Cross-subsidy, which finds vigorous mention in the status paper, is another recurring theme. But thanks to the middle ground selected by Mr. Kumar, most of the Rakesh Mohan committee's notions on the railway system are not mentioned in the booklet.

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