The NITI Aayog has submitted a 20-page note to the prime minister’s office arguing that the convention of presenting a separate railway budget every year be done away with. The PMO has asked the railway ministry to respond. The note states that the separate budget — railways is the only ministry with a budget of its own — had failed to be of use to the sector and had become a “mechanism to announce popular measures”. This is not the first time that anyone has suggested the scrapping of the railway budget. It has been argued that it is a hangover from the colonial era — the practice was started in 1924.
Several reasons have been given in favour of scrapping the annual exercise. But perhaps the most prominent one being suggested is a tenuous one. According to the NITI Aayog note, separate annual budgets for the railways have made them vehicles for populism. To some extent, it is true that each year there is a clamour for new trains and more freebies. However, the note then deduces, somewhat erroneously, that doing away with the budget will do away with populism: “. an action [scrapping the railway budget] that helps reduce the visibility of railways in terms of media attention will actually be a real reform as then many critical areas would possibly cease to be hostage to political compulsions”. This argument blames the people and the media for populism, instead of addressing politicians across generations who have succumbed to it.
Doing away with the presentation of a separate rail budget, and bringing it into the fold of the “annual financial statement” that the Union finance minister presents, is a good idea — albeit for a different reason. Indian Railways cannot afford to wait for annual changes, made with pomp and ceremony. It needs to react more swiftly, and with greater flexibility, to the rapid changes afoot in the wider economy — be it in terms of raising or lowering fares, adapting to new technologies or improving safety standards. Even though Indian Railways is a state monopoly it faces increasingly tough competition from roads and civil aviation. In fact, for the most part, the railways has been losing traffic share, especially to the roads. Basically, the government needs to be more fleetfooted in the way it runs the railways, instead of focusing excessively on the spectacle of a separate budget.