Development and reforms in Railways – both infrastructural and administrative – have been the priority of the Narendra Modi led government as a robust railway has the potential to single-handedly boost the growth of Indian economy and create a huge number of jobs. The Minister of Railways Shri Suresh Prabhu with his farsighted vision, meticulous planning and impeccable execution, has heralded a new era in the functioning of Indian Railways. In the most recent step towards reforming railways, Shri Suresh Prabhu wrote a letter to the Finance Ministry, requesting the merger of the Railway Budget with the Union Budget. The request was accepted by the finance ministry, which implies that there will be no separate Railway budget from the next fiscal year putting an end to the 94-year old practice started by the British.
By the late 1910s, railway network in India had become quite large and the British wanted to reorganise and reform the railways in India for the ease in administration. A 10-member Acworth committee, led by economist William Acworth, was constituted and based on its recommendation in 1922, the finances of railways were separated from the government finances. In a couple of years, the formality was completed and the first railway budget was presented in 1924. Since then, the practice of a separate railway budget had continued.
In India, railway budget has been used as a political tool by most of the railway ministers to advance their political interests in their respective states. Railway budgets became a platform to announce new trains, make some attractive populist announcements and appease the people. Since railway budget became a political tool, railway ministers refrained from taking measures to reform the railways which would not have gone down well with people in short term, such as increasing fare, administrative reforms, advancement in technology, more focus on freights and laying of new tracks. Instead, the focus was more on appeasing people of the rail-minister’s state. Scores of new trains and projects were announced only for the regions where political gains were expected. This led to uneven development of railways, poor finances of railways, massive under-investment, long delays of both passenger and freights, and therefore an extremely poor state of health of the nation’s lifeline. Many strategically important regions in north, northeast and west were ignored because of the regions being politically not very significant.
The first budget shri Suresh Prabhu presented marked a stark departure from the then-existing norm. The focus of his budget was entirely on generating much needed revenue, upgradation of the existing infrastructure, creation of new railway lines, attracting investment, modernisation of the railway network and technology. For first time in decades, no new train or populist measure was announced. It was an apolitical railway budget after decades, which didnt cater to one particular state, but was a budget for Indian railways; it was a budget for entire India. The second budget was even better, with more focus on long term projects such as dedicated freight corridors, generating revenues from non-fare sector, modernisation of stations and upgradation of speed by improving tracks. All these are long-term goals, which will improve the health of the railways without any short-term political gains.
Finally, on the recommendations of NITI Ayog, Shri Suresh Prabhu decided to put an end to the 94-year old practice, which had its roots in colonial era, marking a major reform in the railways and freeing Indian Railways from the political tool it had become. This means that the budget of railways will be dealt by the finance ministry in the same way as any other sector like defense, highways, space, roadways, shipping and industry to name a few. The growth in these sectors on one hand and an extremely poor health of the railways on the other hand can be attributed to the fact that railways has been used as political tool since decades and no attention was paid to improve the health of the railways.
It takes immense guts, dedication and clear intent to end a practice like Railway Budget, which could have been used as a political tool for various state elections and the 2019 general elections! In a country like India, where people vote more on freebies and populist announcements, it may well turn out to be a political suicide, but will free the railways from being used as a political tool and thereby, improving the finances and functioning of railways which is imperative for the development and creation of jobs in India. Wishing Shri Suresh Prabhu all the best in his endeavour to make Indian Railways one of the best railways in the world !
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Kshitij Mohan.
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(The author is a passionate railway enthusiast whose hobby, passion and love is railways. He keenly follows the developments in the fields of railways all over the world. Currently pursuing his Ph.D. from Germany)
