SHRI P. UPENDRA : Railway is an important public enterprise, in fact the life line of the nation. The country should take stock of the health of the system periodically and also assess its strength and weaknesses. Railway Budget gives an opportunity to all of us to make an appraisal. It is for the Ministry to spell out the tasks ahead and afford solutions to the problems. But I find the Budget presented by Shri Nitish Kumar is populist at some places and trivial at other. It lacks the long term perspective. The targets set by the Minister appear to be unrealistic. It contains a lot of jugglery of words. For the first time, he has also tried to conceal the impact of the freight rates and fare increases by telling that the new fares will be so many times of the second class basic fare and so on, instead of straightaway telling what will be the new fares. It only mentions about a line here or a line there, a survey here or a survey there, an extension of train here or an extension there, some fare increases and so on. If you take any Railway Budget, the pattern is the same. You will always find a repetition of what was said earlier except the change of names. If you see the thrust of the Budget, the time has come for us to think whether it is necessary to have the Railway Budget at all!

When the Railway finances were separated in 1920, the purpose was different because they wanted to give to the Railways freedom to expand, freedom to plan for themselves, unfettered by the impact of the general finances. But we find today that the purpose of this Budget is completely lost. There is the same old rigmarole every year and the same old tamasha of the Minister giving finishing touches to the Budget with the Minister of State sitting by his side and the Members of the Railway Board standing behind. Actually, his own colleague in the Samata Party, Shri George Fernandes, when he was the Railway Minister, said that there was no need for a separate Railway Budget and there is no secrecy in the Railway Budget. So, the Minister need not carry a briefcase with the Budget. There is a lot of difference between the General Budget and the Railway Budget. Even if the Minister increases the fares and freight charges and even if somebody buys a ticket two months ahead he has to pay the difference when the new fares come into operation. Therefore, there is no secrecy at all. If the Minister wants to introduce a new train or if he wants to order a survey, why should he wait for the Railway Budget? He can do these things throughout the year. So, I think, the time has come to find out whether it is worthwhile to have a separate Railway Budget, because today, the Ministry of Defence has got almost the same budget, the Ministry of Telecommunications is reaching the same level and the Ministry of Power is also having almost the same budget. Therefore, with about Rs.35,000 crore income and revenue, I do not think the Railways need a separate budget. In fact, a Status Paper each year, probably, will serve the purpose by indicating what the Railways have done.

Sir, this year's Railway Budget does not tackle the basic problems faced by the Railways. What are these basic problems? The freight traffic is not coming upto the mark which the Minister himself has admitted. There are problems like the growing expenses and the deficits, the mismatch between the economic growth and the rail infrastructure development.

MR. SPEAKER: If there is no `Zero Hour', the House will be in order.

SHRI P. UPENDRA : Then, there are problems like the growing social burden, backlog in track maintenance, overhaul of coaches, rolling stocks, etc. The Minister has rightly pointed to these problems.

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11.22 hrs.

SHRI P. UPENDRA (VIJAYAWADA): Sir, the hon. Minister has rightly pointed out the major problems faced by the Railways. I have nothing against him personally. He is very intelligent. He has picked up very fast with his experience in the Railway Convention Committee and all that.

SHRI P. SHIV SHANKER (TENALI): He is a nice man.

SHRI P. UPENDRA : He is a gentleman. He is receptive to the demands made by the Members. That is why he has tried to please as many Members as possible, including me. But when we discuss the health and efficiency of the Railways, I think, we have to say some harsh words also. I quote from the Minister's speech:

"Freight loading has not been as per our expectations. On the other hand, expenditure has gone up considerably. The reduced demand on core sector commodities, such as, coal, foodgrains, iron and steel, cement and iron-ore, has affected the Railways' freight traffic. Against the budgetary forecast of 450 MT, it is expected that the Railways will achieve a loading of around 424 MT in 1998-99, that is, current year. That is about 26 MT less than anticipated."

Similarly, the general goods traffic is decreasing. It is not increasing. The share of the Railways is decreasing. Again he says:

"The freight loading in the current year has been a matter of concern despite various efforts made. Only recently, some signs of recovery have been noticed and we hope that the coming year will be favourable."

I am sorry that I cannot share his optimism. On what basis can he say that in 1998-99, less traffic to the extent of 26 MT has been anticipated? On what basis can he say that in 1999-2000, it will again be 450 MT. It is only a jugglery of figures because he has to balance the Budget. Unless he shows 450 MT of freight traffic, he will have to increase the fares and freight. To avoid that, he has again put it at 450 MT. He has not mentioned any specific strategies by which he can bring back the traffic which he is losing.

The world over, the Railways are now going to be a profitable business. Though they have lost the traffic through their own formulae and policies, they are recovering now. Therefore, this is the time for the Railways to recover the lost traffic also.

They are losing the freight traffic particularly to the roadways for the last few years. For example, in 1950s, the economy of India was rail dominated. Today, it is road-dominated in 1950, the Railways carried 89 per cent of the freight traffic and the roadways carried only 11 per cent. In 1997-98, the Railways carried only 40 per cent as against 60 per cent by the roadways.

Similar is the case with the passenger traffic also. In 1950-51, the Railways carried 80 per cent and 20 per cent was by road. Today, it is just the reverse. Moreover, it is high rated traffic and bulk traffic. What should worry the Railways is the high rated traffic and the bulk traffic which was going earlier only by the Railways, like steel, cement, coal, iron-ore, fertilisers, foodgrains, fuel, etc., and has now switched over to the road.

That is the disturbing development for the Railways. The Railways have to evolve a strategy to win back this traffic. When it comes to the Railway finances, Sir, the Minister says:

"Unlike 1997-98, current Financial Year has not been very favourable, so which was apparent."

He also says:

"It is expected that there will be a shortfall of Rs. 1056 crore in the earnings as compared to the target for the year despite increase in passenger, and other sundry earnings."

He also says:

"Plan expenditure has also been re-assessed and kept at Rs. 8755 crore as against the Budgeted outlay of Rs. 9500 crore."

So, the Railway Plan has been pruned.

"It is proposed to withdraw Rs. 1313 crore from the Railway fund balances to meet the additional pensionary liabilities."

To sum up, it only shows the bankruptcy of the Railway system. If they have to withdraw money from the Railway funds to meet the additional pensionary liablities, that shows that the Railway finances are in deep trouble.

He has mentioned a number of steps to increase the revenue but I do not think that they are going to fetch any additional revenue for the Railways. One peculiar thing which we find in this year's Budget is that the increase of freight rate by four per cent covers all commodities. In every Budget, they used to exempt the foodgrains, the fodder, the relief materials etc. from any additional levy but this year, the Minister has said that the commodities are also not exempt and the freight rate increase covers everything. As usual, they will come and say that the increase does not matter much, it will result only in 0.0001 per cent increase in the Price Index and all that. We have seen it in the past. It is not going to be correct, and definitely, it will lead to more increase in the prices of general commodities also.

Another point is that there is no rationale or costing while fixing this freight rate increase. They have made an ad hoc or across the board increase of four per cent. On what basis? Has any costing been done? Why four per cent, why not five per cent or three per cent or three and a half per cent? There is no rationale in the increase. These are all ad hoc or random decisions. I think it does not show any expertise on behalf of the Railways in looking after their finances. They should have done some costing, and any increase should have been based on the costing pattern only.

The Minister also says:

"Increase in working expenses and slowing down of growth of freight traffic has resulted in reduced generation of internal resources which are not sufficient to meet the plan requirements."

That is why, he had to withdraw from the fund. It is very clear. The Railways are not able to get their internal resources augmented to meet the additional expenses also. Now, what we have to find is this. This four per cent increase may look very minor but it is counter-productive in the sense that on the one side they are losing traffic to the roadways and they are not able to compete with the roadways, and again they go on increasing the freight rates, then how can they win back the traffic going to the roadways which is definitely counter-productive? Officers of the Railways should realise this also. They are projecting next year's revenue from both passenger and freight traffic as Rs. 32,411 crore. On what basis? These are unrealistic projections. Again, next year, he will come and say - if he continues there that due to so many other factors which have intervened, they could not achieve the target and there is a shortfall and all that. This is not the way of dealing with the Railway Budget.

One more point which I would like to make is about the operating ratio. The percentage of expenses to the gross earnings has been gradually increasing. Now, he says:

"During 1997-98, it was 91 per cent. In 1998-99, it is 90.9 per cent."

That means, according to him, there is an improvement to the extent of 0.1 per cent.

This is a mere jugglary of words and playing with the figures. Nobody can say that it is 0.1 per cent less or 4.4 per cent more. My information is that this is going to be 94 per cent and something has been hidden. Therefore, it has to be seen that the operating ratio is cut down as far as possible.