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Railways Minister Speech
Introducing
the Railway Budget, 2001-02
Mr. Speaker, Sir,
I rise to present the Budget Estimates for the year 2001-2002 for the
Indian Railways. At the outset, I would like to sincerely thank our
Hon'ble Prime Minister Shri Atal Bihari Vajpayeeji for his valued
guidance in discharge of my ministerial responsibilities. I could count
on his advice and encouraging direction whenever I approached him with
any issue relating to Indian Railways. It is my proud privilege to
present the second Railway Budget of the millennium and I would like to
sincerely thank you, Mr. Speaker, Sir, and through you, all the Hon'ble
Members of this August House for enabling me to do this.
Sir, last sixteen months have been a period of intense experiences for
me. During this period, I have seen Indian Railways from close quarters.
I have seen millions of Railway family members, working round the clock,
to run more than 13500 trains across 7000 stations every day, cutting
across almost all the States. I have seen Railways spontaneously rushing
into the interiors of Orissa, Bengal and Gujarat with a helping hand
when unfortunate natural calamities struck them. I have also seen
Railways ferrying water and fodder to the drought hit states to save
precious lives. Posterity will not forget the sight of hundreds of
trains trailing into Allahabad, day after day, carrying millions of
countrymen on the occasion of Mahakumbh. Sir, when our jawans and tanks
are moving to the border areas and when foodgrains from Punjab and
Haryana are going on our trains into the interiors of far flung states,
I feel proud to be associated with Indian Railways as one of its family
members. A railway compartment in our country represents, perhaps, the
best example of a secular, united India, bringing about emotional,
regional, cultural, linguistic and economic integration of our diverse
society. With these experiences, Sir, I have developed a firm belief
that just as water and air are crucial for existence of a human life,
Railways are equally essential, for the life of the nation. This
organisation, being the largest Railway system in the world under a
single management, has enormous strength and potential.
Sir, amongst the transport systems world-wide, Rail mode is
re-establishing itself. This resurgence is because Railways are six
times greater energy efficient, and four times higher land use efficient
mode of transport. Railways are, perhaps, the most environment friendly
transport system, the world has ever known. With its huge network
spanning over 63,000 route kilometers, Indian Railways are, in fact,
engine of growth for the national economy. It is difficult to perceive
growth of Indian economy without a corresponding growth in Railway
infrastructure.
But, Sir, sadly, Indian Railways with all its inherent strengths and
potentials has not received the attention it deserves from the nation.
With the increase in population, expectations of the countrymen from
this system, and the social responsibilities reposed on it, are
continuously on the rise. On the contrary, the investments in this
system have been almost continuously declining over the years. The
capital support from the General Exchequer which reached a peak of 75%
in the Fifth Five Year Plan, fell to 42% in the Seventh Five Year Plan
and skidded to a low level of 18% in the last two years of the Eighth
Plan. To fill-in the gaps, Railways have been forced to resort to larger
market borrowings with attendant huge burden of interest liability. This
has inflicted long term damage to the otherwise healthy Railway
finances. As a consequence, railways share in freight movement has also
dropped from 89% in 1950-51 to about 40% as of now.
Sir, Indian Railways are at cross roads today. We are facing the
dilemma of realising our true identity, our objectives and goals. On the
one hand, we have the social responsibility of being an affordable
carrier of people and goods. On the other hand, we are often expected to
play the role of a profitable commercial enterprise and, thus, fend for
ourselves. I learn from many economists and experts that the answer lies
in treating ourselves as 'cost centres' and 'profit centres'. Sir, the
countrymen know that Railways have grown as a 'people-centric',
'society-centric' public utility. Sir, let us pause here for a moment
and do some soul-searching. Are we a commercial enterprise only? Or are
we a public utility? Or should we continue to play a combined role in
the larger interest of the public good? Sir, Indian Railways are not
merely a transportation utility. They are a dependable friend of the
Indian people. And just as a friend in need is a friend indeed, the
Railways have stood by our people in good as well as bad times.
Sir, Railway experts and economists have been criticising Railways for
starting large number of projects with low or negative rate of return.
Sir, I am neither an expert nor an economist. But as one of the common
man in this country, I feel that Railways existence is necessary to pave
the way for development. Emphasising only high economic rate of return,
will discourage any developmental initiative in far flung areas. Can we
afford to do it, Sir ? I expect that my Hon'ble colleagues will guide me
in searching for an answer to this question.
Sir, there are large number of challenges which Railways face today.
The dual roles of Railways as public utility and a commercial
undertaking are at times conflicting while the sources for funding these
two diverse activities are the same. Railways also do not receive
compensation for social service obligations. Technological modernisation
of Railways is critically required, but low investment over the last two
decades has almost stopped this process. Unfortunately, the support from
General Exchequer also has been taking a downward trend right from fifth
Plan till Eighth Plan, dropping from 75% to 18%. This is pushing
railways on to borrowings at high rate of interest causing permanent
damage to its finances. Internal resources of railways have also
suffered a severe and permanent jolt immediately after implementation of
Fifth Pay Commission recommendations. Railways have 16 lakh employees
which is 40% of the entire central government strength. In the coming
year, pension alone is likely to cost Rs. 5,800 cr which Railways have
to bear themselves. Otherwise, Pension liabilities of other Government
employees are borne by General Exchequer.
Sir, during my tenure, I have initiated several measures to meet these
challenges within our limited means. For the first time, Railways
seriously started pursuing the non-traditional sources of revenue
generation. However, developing new sources, which are non-traditional,
and tapping them takes time. I had also launched a serious economy and
austerity drive. Sir, the House is aware that this drive had yielded a
saving of Rs. 850 cr during previous year. For the current year also,
the target in this regard is Rs. 865 cr. However, Sir, these measures
are not adequate to meet the severest challenges. Some more steps are
needed which I would like to outline below:-
For financing socially relevant projects and for running train
operations to meet socially desirable ends, outright grants without
dividend liability should be provided by the State. On the other hand, a
special fund with a mix of seed contribution, borrowings and private
sector participation should be created for funding remunerative and
operationally required projects.
Railways need to develop market oriented and customer friendly outlook
due to emerging competition within the transport sector.
Sir, the House is aware that much discussed recommendations of Railway
Safety Review Committee chaired by Justice Khanna have evoked large
support from Hon'ble Members. But Railways are still awaiting the
recommended one time grant for safety purposes.
There is urgent need to prioritize railway projects for speedy
implementation. Cost-sharing of such prioritized projects with the State
Governments, which has recently begun, should be further intensified.
Sir, I would like to thank the State Governments of Andhra Pradesh,
Tamil Nadu, Maharashtra and Karnataka who have already come forward in
this direction. I wish other State Governments will also join these
efforts.
Railways have an enormous hidden wealth in the form of land, airspace
etc. which needs to be unlocked to augment its resource base. Several
non-traditional means of mobilising resources have been introduced
recently. But this process needs to be taken forward in all seriousness.
Sir, these steps, I feel, will bring about major improvements in the
Railway finances. I am happy to inform the House that this aspect is now
being professionally looked into by an Advisory Committee under the
Chairmanship of Shri Sam Pitroda.
Rail Budget Speech Part II
