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Friday 16 March 2012

[Marxistindia] Railway Budget

news from the cpi(m)
March 14, 2012

Press Statement

The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:

Railway Budget 2012: Imposing Burdens on the People

and Ruining Indian Railways

The CPI (M) strongly protests the across the board hike in passenger fares announced in the Railway Budget along with the increase in freight charges for most commodities like coal, fertilizers, foodgrains, steel, cement etc. which was notified on 6th March 2012.

Fares for second class and sleeper class travel in express trains have been hiked by Rs.3 and Rs.5 per 100 kms, respectively. This will adversely impact millions of rural migrant workers, employees and small entrepreneurs who have to frequently travel thousands of kilometers away from their hometowns. The around 20% hike in freight charges will also have an inflationary impact. The anti-people nature of the Railway Budget is further exposed by the announcement of adding a 'fuel adjustment component' to passenger fares, which implies periodic increase in rail fares in tandem with the hike in fuel prices.

The Railway Minister is imposing these burdens on the people in order to cover up for its own inefficiencies, which has led to the bankruptcy of the Indian Railways. The railway budget making exercise has suffered from a steady erosion of credibility over the past few years, with budgetary targets going haywire in the course of the year. The Operating Ratio of the Railways (how much is spent in order to earn 100 rupees) for 2011-12 was budgeted at 91.1% last year. Now it is gone up to 95%, exposing the massive inefficiency of the Railways.

Such a sharp deterioration of the financial situation of the Railways under the UPA-II, from a position of surplus attained under the previous government, demands an explanation from the Prime Minister. With such massive overshooting of budgetary targets, the claims made in the railway budget of improving the Operating Ratio to less than 85% in 2012-13 and to less than 75% by the end of 12th five year plan (2017) cannot be taken seriously.

The glaring inefficiency of the Railways can be seen from the fact that it has missed its freight loading target by 23 million tones this year. This under-achievement is a repeat of last year and is inexplicable at a time when the economy has been growing at 7-8%. There is a shortfall of over Rs. 2000 crore in gross traffic receipts from what was budgeted last year.

The credibility of the railway budget making exercise has further suffered under UPA-II because of the plethora of promises made in a budget one year, only to be forgotten next year. There are several examples since the 2010 budget: "50 world class stations", "6 bottling plants for fresh water", "5 sports academies", "522 hospitals and diagnostic centres including 40 multi-speciality hospitals", "50 Kendriya Vidyalayas", 7 new coach and loco factories, 5 new wagon factories, rail axle factories and so on. The silence or obfuscation of the present Railway Minister on these promises confirm that these budget announcements made by the former Railway Minister (present Chief Minister of West Bengal) in 2010 and 2011 were all gimmicks and a fraud on the Indian people. These false promises are now being utilized by the present Railway Minister to go for large scale privatization of the Railways through projects like "Indian Railway Station Development Corporation", "Logistics Corporation" etc. in the PPP mode.

On the crucial areas of railway safety and modernization, all that was offered were myriad committees and their recommendations, which never seem to take off the ground. The "feasibility" study of high-speed rail is going on for the past two years without any result. The Freight corridor project is also not making any progress. All this reflect poorly on the Indian Railways as an institution and shows that it has become incapable of project delivery. The Railway Minister in his speech was openly taking out his frustration by blaming the Finance Minister for inadequate funding provided to the Railways through Gross Budgetary Support.

The Railway Budget documents show a gradual reduction in the staff strength of the Railways from 13.66 lakh in March 2010 to 13.62 lakh in March 2011. The assertion made by the Railway Minister regarding fresh recruitment of 80,000 persons in 2011-12 cannot be verified in the absence of current employment figures in the budget documents.

The CPI (M) calls upon the people to protest against this anti-people railway budget which has imposed new burdens in the form of fare hikes and increase in freight charges. The CPI (M) also cautions the people against a gradual destruction of the Indian Railways under the present dispensation through false promises, gross mismanagement and inefficiencies.

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