RAILWAY

Scrap the railway Budget and the ministry

The government should merge all the transport mode-specific ministries into a unified transport ministry. It’s what the world has done

A study covering all modes of transport by consulting firm RITES Ltd has estimated that the consistent and unchecked fall in the share of railways through the years cost the Indian economy about $385 billion (16% of total transport cost) in the year 2007-08. Photo: Mint

Tomorrow, we shall have the first railway Budget presented by theNarendra Modi government. I have always been rather confused by this ritual. Why a separate railway Budget? Why are the railways segregated from everything else in the economy and given this little show of its own?

Yes, all right, the British began it. After all, it was the largest British project in India, and it transformed both the Indian economy and the fortunes of the British Raj and its mercantile class. “(Before the arrival of the railways) the common means of freight transport was the bullock cart, which could travel no more than 30km a day on India’s dirt roads,” I am quoting here from an essay I wrote in India Junction (Rupa, 2014), a book celebrating 160 years of the train in India. “These roads became near impassable during the monsoon, and for the rest of the year, traders faced the threat of en route piracy... Trains were capable of travelling up to 600km per day and they offered this superior speed on predictable timetables, all months of the year, and without any serious threat of piracy or damage. Railroad freight rates were also considerably cheaper: 4-5, 2-4, and 1.5-3 times cheaper than road, river and coastal transport, respectively. This was a boon.” Of course, the British were proud of what they had wrought. They gave it a separate budget.

The railways also played a much bigger role than just economic efficiency. Passenger travel by train connected people, made a significant dent in the caste and communal systems, exposed Indians to their country’s myriad cultures and branches of knowledge (How else could the average Tamilian ever have tasted the rosogolla, and the Bengali the dosa?). It was the greatest force of modernisation and unity that India had ever seen. Mohandas Karamchand Gandhi could hardly have come to know the quandary, the diversity and the pride of his nation and its people se well, quickly and insightfully, without having taken the pan-India tour—under the advice of Gopal Krishna Gokhale—with his wife Kasturba. It was one of his first acts upon returning from South Africa. In fact, one can say with some confidence that the ‘Mahatma’ was born on Indian trains.

But things change. For decades, the railways has been used as a milch cow by successive ministers as simply a means to generate employment for their supporters, waste money on unproductive projects in their states and constituencies, launch unnecessary “prestigious” trains for political purposes, and invest very little in modernization and for long-term profitability. All this, while raising freight rates to subsidise passenger fares to an extent that defies all economic sense. Freight doesn’t vote, passengers do. Just consider the huge outcry when the current government raised passenger fares recently. The annual railway Budget is usually the most cynically political exercise under the garb of economics and development.

The fact is: the cow is dry now. It has no milk left. And given that the railway minister’s post was seen as a purely political one, governments have focused their transportation investments on roads. As a result, the railways’ share of total inter-regional freight traffic came down from 89% in 1951 to 30% in 2011-12. Even passengers have deserted the railways in very large numbers. The share of road in total passenger traffic (billion passenger km or bpkm) carried by road and rail together has increased from 32% in 1951 to about 90% in 2011-12.

Why should we be worried? Because, as compared with road, rail consumes 75-90% less energy for freight traffic and 5-21% less for passenger traffic. Unit cost of rail transport is lower than road transport by `2 per net tonne-km and `1.6 per passenger-km. For passenger transport, road accident costs are 45 times higher than rail; for freight, it’s eight times higher. A study covering all modes of transport by consulting firm RITES Ltd has estimated that the consistent and unchecked fall in the share of railways through the years cost the Indian economy about $385 billion (16% of total transport cost) in the year 2007-08.

So what is the solution? Like in many other areas, it is there in an expert committee report that is lying in the Prime Minister’s Office (and several other ministries). The national transport policy development policy committee (NTDPC) was set up by former prime ministerManmohan Singh to take a look at India’s transport sector—from strategy to investment needs—with a 20-year time horizon. The report was submitted to Singh in February.

NTDPC, headed by Rakesh Mohan, currently India’s executive director at the IMF, and one of the key figures of India’s economic liberalisation, has suggested doing away with the railways ministry. In fact, it has suggested doing away with all the specific transport-related ministries (roads and highways, shipping, civil aviation) and clubbing them all under a unified transport ministry.

The idea may sound radical, but the logic is absolutely simple. Transport exists to carry people and goods from point A to point B. The customer—the passenger or the businessman—does not particularly care about mode of transport. He cares about reaching—or his goods reaching—the destination in the safest, most comfortable, quickest and value-for-money way. India’s policy makers have never understood that transport should not be looked as roads vs railways vs coastal shipping, but as a multi-modal integrated system. And how could they, with the present set-up comprising so many mode-specific ministries, each lobbying for more funds from the finance ministry and the Planning Commission for its particular area of interest? Why should the roads minister care about railways? Why should anyone think holistically?

So we have containers lying in our ports for ridiculously long hours, because the roads to the port yards are in very bad shape, or there is no last-mile connectivity by train. Or highway construction gets stuck halfway because they have to cut through land owned by the Railways or the Airports Authority of India. In fact, our transport system is a mess, and its uncoordinated inefficiency certainly shaves a couple of percents form our gross domestic product growth each year.

This, when nearly every other country in the world, and every one of India’s perceived peers, has moved in the direction of a unified transport ministry. Railway systems have also been included as part of this unified transport ministry or equivalent. China’s integration of rail into the larger transport ministry is under way. Most of these integrated ministries retain the basic division of labour across departments focusing on different modes of transport, with additional “integrative” sections looking at energy efficiency, innovation, and other cross-cutting functions.

As NTDPC’s India Transport Report recommends, the country needs to have a single unified ministry with a clear mandate to deliver a multi-modal transport system that contributes to the country’s larger development goals including economic growth, expansion of employment, geographic expansion of opportunities, environmental sustainability, and energy security. The current collection of ministries creates a list of mandates to deliver particular types of transport infrastructure, with little incentive or ability to consider how these pieces interact as a circulatory system for moving goods and people.

Transport planning is too big a job for a bunch of ministers protecting their own turfs, or to the Planning Commission (which, anyway, may become history very soon). There should be one transport minister who should be held responsible overall for the transport system’s contribution to development goals articulated by the government. The existing ministries should become departments focused on delivering effective transport infrastructure and services for each mode. Each could be led by a minister of state with usual bureaucratic support. Each department should focus on building a credible case for investment and policy in its mode of transport to meet the broader framework set at the ministry level. This distribution of authority and technical expertise is crucial to maintain an ongoing, constructive discussion of various means for meeting transport development goals.

Of course, this sort of consolidation would have been difficult—if not impossible—in an era of fractious coalition politics; there would be a serious shindig over the distribution of goodies. But Prime Minister Modi has spoken about consolidating ministries, and he also has the mandate and the stature right now to push through necessary reforms. Assigning a single minister to power and coal is an intelligent and laudable move. But if he really wants to shake things up, have a nimbler, more coordinated government, he should abolish this relic of the raj—the railway ministry—in its current form, and also the other transport-related ministries and create a single transport ministry that takes responsibility for moving people and goods in the most economically viable and environmentally friendly way.

And he does not have to hold too many long meetings—something which he is alleged to abhor—to do it. It’s all there in India Transport Report (with an executive summary too) that’s lying in his office. Let it not gather dust like so many other reports commissioned by so many governments. And let this be the last railway Budget.