Kharge readies for Feb 12 Interim Railway Budget – pressure mounts for new lines & factories

Railway vote-on-account: can Railway Minister resist the populist urge

Tremendous pressure mounted on Centre and Railway Ministry to announce sweeteners, such as new train lines and rail-based factories, to woo voters, as Railway Minister Mallikarjun Kharge readies for the interim Budget, to be presented on February 12.  Till late last week, the Minister had not given in to these demands and had resisted the move to announce any new projects, as implementation would be in the hands of the next Railway Minister.

“This being the election year, there are several demands and huge pressure. The announcement of a railway over-bridge, or a rail connectivity or a factory project leads to economic buzz in the region. It may be in the form of real estate value increase anticipating rail connectivity or land acquisition for a factory, or building of road over a level crossing,” explained a Railway Ministry source.

Vote-on-account is the presentation of statement of revenue and expenditure for the entire year, with a Parliament nod for expenditure in the next four months. “To that extent, it should ideally be business as usual, with no large policy shifts beyond what is already stated. The new Railway Minster, who should be in by say, June, is free to make some priority changes,” said another source. Aware of this, Kharge had attempted to make key announcements in the supplementary demand for grants, which were passed in December 2013 without discussion, said sources.

More sweet nothings?

Many point out that Lalu Prasad, who presented the last interim budget for UPA-I in 2009, was not miserly in announcing new projects. But, there is also recognition that voters now are more aware and prefer an honest approach to sweet nothings. After all, it is such announcements made over years that have given Railways the dubious distinction of having pending projects that require lakhs of crores of money.

So, whether to announce new projects that will not really yield results is a call that Kharge will have to take.

Another key point would be whether the Minister resists the temptation to announce token fare reductions. This when the Railways’ working expenses have overshot the budgeted limit by almost ₹5,000 crore for the three quarters up to December 2013, and revenues reduced by ₹3,004 crore for the nine-month period up to January. Moreover, he faces dissatisfied Railway employees, who have recently voted for an indefinite strike through their unions.

These are the same unions that have traditionally stood for the Railways’ sound financial health by supporting fare increases and resisted populist measures.

That said, the Railway Minister is expected to spell out the achievements of the Railways not just during the last one year but the 10-year rule of the UPA.

To be fair to Kharge, who happens to be the senior-most Railway Minister in the UPA regime going by age, there are several reformist measures that he has green-flagged in his short tenure of seven months.

These include linking fuel cost to passenger fares, the decision to set up a rail tariff regulator, and charging extra through a dynamic fare mechanism in select routes at peak travel times.

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