A shining railway Budget 2008 – but at what cost?
As I watched the railway budget being presented by the Railway Minister Laloo Prasad Yadav today, I tried to control my cynicism. I mean, it is great that the minister has turned around the railways from a loss-making monolith to a profit making one. Corporate sector must be burning with jealousy. Just a taste of the figures:
 A Rs 250 billion surplus fund
 Gross Traffic Revenues 16 percent higher than the previous year and 2 percent higher than the Budget Estimates!
 Operating Ratio likely to improve from the budgeted 79.6 to 76.3 per cent – best in last four decades, it is said, one of the best in the world.
 Net Revenue expected at Rs. 18,416 crore -double digit growth in traffic earnings maintained in first nine months, growth in passenger earnings 14 percent, expected growth in goods earnings 14 percent.
But what about consumers? Profits may have climbed from year to year alongwith passenger traffic, but how has it helped consumers? I don’t see any change at the ground level. I travel regularly by Indian Railways and there isn’t any dramatic improvement in the food or general hygiene levels. In fact platforms are filthy and so are the trains in most of the cases. If I come across a clean coach once in a while, I am surprised.
Worse, the railways continue to be tardy when it comes to safety. Guess what, about one percent of monies available are used for safety! And then, the railways use old/outdated equipment, infrastructure and technology. Sure, there are plans to upgrade in the coming year, but this should have been a priority surely. No organisation can afford to neglect it’s customers, but the Indian railways has done so….because it can. It has no competition. It’s a shameless monopoly.
No wonder the profits are so high…there hasn’t been a corresponding increase in consumer comfort and safety standards. Laloo did the job in a way that a corporate honcho would envy, and in a way a corporate honcho might not have been able to get away with.
From Losses to Profits – How was it done?
Laloo Prasad Yadav increased revenue at minimum cost to his company…er…the government-run railways. No wonder the success story of the Indian Railways is now being studied at Harvard and Wharton universities, not to mention the IIM’s in India! Although they too had turned up their noses at the dirt they encountered on the trains. Revenue was increased by various measures like:
- More coaches introduced
- More berths per coach
- Freight carrying capacities of wagons increased
- New coaches with higher carrying capacities brought in
- New trains initiated
- New routes started
- Many trains converted from ‘express’ to ‘superfast’ enabling an increase in fare
- Lower class fares kept in check
- Higher class fares increased
Profits have also been padded by introducing the 90 advance reservation system, a system which had been disbanded…Lalu re-introduced it last year and in the bargain you can guess how much the railways got in it’s coffers all of a sudden! This system causes great inconvenience to passengers, creates an artificial shortage of tickets and increases the hold of touts.
But who cares. Because the consumer has no choice but to go to the Indian Railways. Thank heavans for the low-cost airlines, which I believe are proving to be a nuisance to Laloo.
The railways will continue to lose the higher paying passengers if they don’t pay attention to consumer comfort. All that his profit making measures have given passengers is overcrowding!
The future: A lot has been promised to improve consumer comfort in this year’s budget and we need to take comfort in that…if and when it happens. Here is a short list:
- To reduce lines at ticket counters, the railways is exploring the option of (1) issuing tickets through mobile phones (2) increasing number of counters and (3) Automatic Ticket Vending Machine counters
- Overnight mail/express trains to have on-line coach indication display boards to give information about running of the trains and likely time of arrival.
- Heights of all low and medium level platforms to be increased.
- Lifts and escalators to be installed at 50 major stations
- Platforms of 30 stations to be extended for running longer passenger trains
- Multi-level car parking lots and modernized car parking facilities to be created at 30 major stations.
- Onboard cleaning to be introduced on all Rajdhani, Shatabdi and Superfast mail and express trains, using modern machines.
- 36000 coaches to be provided clean toilets by the end of the 11th Plan at a cost of Rs 4000 crore to put a permanent end to the problem of discharge from the train toilets.
- Ergonomically designed modular toilets with attractive interiors for better hygiene and cleanliness will be introduced.
Another point – Railway infrastructure is ageing and the question is: When will it be refurbished? Is there money for that? Railway bridges across the country are deteriorating by the day, and so are tracks, many of them are a century old. It’s going to cost the railways crores to fix all this…
(Photo of Laloo is from Rediff and the station and train photos are by me)
Other articles on the Indian Railways: Railway plan to improve railways stations
When will the Indian Railways clean up their act?
Profits at the cost of consumers is the mantra of Indian Railways
The 90 day advance reservation system stinks
Online booking of railway tickets doing very well
Broad gauge or Standard gauge for Mumbai Metro?