Lok Sabha

July 11, 2019

Mala Roy speaks on the Demands for Grants for Ministry of Railways

Mala Roy speaks on the Demands for Grants for Ministry of Railways


Chairman Sir, as the whole country listened in anticipation, they are highly disappointed with the negligence shown towards the Indian Railways by the Minister. One should not forget that the Indian Railways is the lifeline of India. It is the fourth largest network carrying over 8 billion passengers in a year. It is second in capacity after China. It is going through its most critical phase as the operating ratio has been quite high in the last few years. Today India spends Rs 97.3 in order to earn Rs 100 from the Railways.

Now, the hon’ble minister wishes to lower this ratio by increasing the gross budgetary support in 2018-19. The gross budgetary support from Central Government was proposed at Rs 55,088 crore; this is a 38% increase from the revised estimate of 2017-18, which was Rs 41,813 crore.This year the central government has again increased the support to Rs 66,105 crore. This means in the last two years the central government has increased 61% of its budgetary support.

The earning from the Internal sources, mainly the freight and passenger traffic, has gone down from 31% in 2010 to just a meagre 8% in 2019. with declining internal revenue, the major source of earning of the Railways is budgetary support and borrowing. The Indian Railway Finance Corporation has taken a loan of $750 million from Asian Development Bank in order to finance the electrification of railway tracks as proposed by the Minister. The percentage of revenue from borrowing has increased from 20% in 2010 to 55% in 2019 and this will be an added burden to the common people of India. The financial condition of the Indian Railways is in shatters to say the least but there is no roadmap.

The Budget talks of raising Rs 50 lakh crore for the rail sector till 2030. Budget said it will be raised through the PPP route, as finishing the sanctioned project through budgetary support of Rs 1.5-1.6 lakh crores per year takes decades. PPP has not been a success in the railways in the past, as admitted in the first railway budget speech of NDA government in 2014.

The budget does not elaborate any plan to raise this capital. It is believed that this is the way to bring in capital through loans which will be the burden of debt on Indian Railways. Even LIC has refused to give the promised Rs 1.5 lakh crores that was the MoU amount few years ago. Unions believe that this is sowing the seeds of privatisation in the future, like Air India.

Six hundred stations were identified for redevelopment to be executed by the contractors and even the adjacent land owned by the railways were supposed to be given to the private player for 45 years of lease and for building malls and plazas for their commercial use. It is nothing but filling the private coffers at the cost of national assets at the intent of the government.

At present 491 railways projects, including 189 new lines, 50 gauge conversation and 247 doubling projects are in different stages of execution, planning and sanction. The total length of the projects reach 48,860.64 km costing Rss 6.476 lakh crores. During the last three years, and the current year, Railways has taken up surveys for 272 railway projects, new lines, gauge conversion and doubling works for a total length of 26,954 km. The expenditure of the 491 projects up to march 2019 has been Rs 1.43 lakh crore. Projects that get less money and hence are on slow lane, low on priority, are in Bengal.

The bullet train project has missed its internal deadline for land acquisition. When the government first wanted to advance the deadline to August 2022-2023, now it says the only a small stretch will be open by August 2022. Going by the progress on the ground, it looks unlikely.

Modernisation – the old tracks and non-functional level crossing barriers, which will eventually decrease the number of train accident and increase speed for passengers’ convenience.

The budget of the government should not be aimed at the privatisation of railways and to increase earnings through plugging the loopholes in the system. The government should keep in mind the government-owned railways provides nationwide connectivity for common people. It appears the government is taking the path of more PPP and furthering the path of privatisation in the garb of modernisation and efficiency.

If the government does not make the budget more friendly for common people we will be reminded of the famous saying – “If a train does not stop at your station, then it is not your train.”