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Railway Budget 2002: Off the beaten track

Ajay Singh

When he became Railway Minister, Nitish Kumar was clear about one thing, he was not going to play Mamata Banerjee and mouth the lines scripted by her, while presenting the Railway Budget this time.

Kumar had hesitated to take up the railway portfolio following Banerjee's exit from the National Democratic Alliance just before the West Bengal Assembly polls. Earlier, Kumar was moved from railways to agriculture because Banerjee wanted the railways portfolio and then, was moved back to railways. So Kumar was acutely conscious of the precarious financial position of the railways following the populist budgets presented by Banerjee.

In successive pre-budget meetings with Railway Board officials, Kumar set the agenda clearly. He made it clear he would not hesitate to hike fares and freight charges and take certain unpopular decisions, if necessary, to bring the Railways back on track.

Highly placed sources said the minister was concerned about "fictitious" revenue figures that featured in the last year's budget. He was particularly angry about the manner in which Railway Board officials had shown a possible earning by the Railtel, to the tune of Rs 700 billion.

At a meeting of the group of ministers (GoM), communications and IT minister Pramod Mahajan had virtually rubbished the whole project.

Kumar had to grapple with these "fictitious" figures and had to come up with a more realistic assessment of the Railway's finances. What appears to have worried Kumar, was, for the first time the Railways' operating ratio was 104 per cent till the end of December.

Sources close to Kumar said the minister had made up his mind to raise the passenger fares and freight charges as the only option to save the Railways from an acute financial crisis.

Aware of the fact that a major portion of the Railways' earning through freight was diverted to the roadways, Kumar mooted the idea of ending subsidies on passenger fares.

Right from the beginning, Kumar gave clear hints that his budget would be a radical departure from the past.

Putting an end to the usual practice of announcing big projects in the budget, the Cabinet had already made it mandatory for the railway minister to announce only approved projects. This was on the basis of a recommendation made by Kumar.

Kumar also evolved formulae for the allocation of projects to states, in accordance with their sizes and requirement. "The idea behind this formula is to curb the tendency of railway ministers, including future ministers, of announcing projects in their own states," sources quoted Kumar as having said.

In pre-budget meetings with officials, the minister gave indications that he would not shy away from taking tough measures, regardless of political consequences.

For obvious reasons, the railway budget is unlikely to elicit a positive response from the NDA alliance partners. But Kumar appears to enjoy the confidence of the Prime Minister and all the major allies, including the Telugu Desam Party, who have been briefed by the minister about the tough measures needed to ensure the financial viability of the Railways.

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