Between 2007-8 (actual figures) and 2009-10 (estimated) IR's surplus is expected to deteriorate by 80 % from Rs.134.31 bn to Rs. 26.42 bn. The appropriation to pension funds is going to almost double from Rs. 80 odd billion to Rs.134 bn. Just to put it into context - 2009-10's pension bill is going to equal 2007-08's surplus!
Working expenses will grow by 53 %, miscellaneous receipts growth will be marginal, while gross traffic receipts (the bread & butter) will only grow by 23 %. Hence the operating ratio (expenses/revenue) will decline from 75.9 to 92.5 and the surplus appropriated to IR's development fund in 2009-10 will be a paltry Rs. 2000 cr (Rs. 20 bn or just US$ 400 mn).
Clearly IR is headed for a funds crunch and will require massive off-budget support for all its investments in freight corridors, new lines, loco factories and what not. So why did Mamata Didi not raise fares?
Well freight rates are already very high (unbearably so, say IR's customers) and were last increased in December 2008, not so long ago. Besides IR is adept at slapping additional charges and reclassifying commodities several times during the course of a year. So we could see some "adjustments" as the year unfolds, especially if crude prices go through the roof once again. However, whether these measures will result in useful extra revenue or only increase customer flight is moot. This is because IR has milked the freight car far too hard and for far too long.
Thus Mamatadi has really no excuse for not raising passenger fares (esp Sleeper Class) sharply, except that she is a hard-core socialist (i.e. populist)politician. But I think she too has seen the writing on the wall and the only reason she didn't raise the fares on Friday is that she would much rather do them later, without all the hoopla that surrounds the budget. Champs of the Common Man like Didi and Lalu just cannot afford to announce such "anti-people" moves when the entire nation is watching them on Budget Day. They would much rather announce it on a different, ordinary day, ideally when everyone's attention is fixed on something else!
Much is being made of utilising IR's surplus land to generate additional revenue. But land on it's own is of little use - who will build on or add value to this land for the revenue to start pouring in? The entire Real estate sector is in the doldrums, and IR has scarce funds for its own projects much less for commercial property development. And industry will not want to lease the land to set up factories and the like unless it is sure it can be leased for a minimum of 99 years, and IR will not ask for the land to be given back to say lay a third line or something. So, don't expect too much relief from the land option.
So clearly tough decisions will have to be made sooner or later: hiking passenger fares substantially, cutting costs, losing surplus staff, closing lines, avoiding waste (just how many zomes are there now?) and the like. Question is whether all this is possible during Mamata's reign.I doubt it very much - she's already announced 57 new trains!
And finally; all the papers mentioned the fact that Didi drove to Parliament in her ordinary Maruti Zen. Well, she is not my favourite politician but there is no doubt that she has no use for the trappings of office or the accumulation of pelf. One of the pink papers has a picture of Didi being driven to the House in her sans AC Zen with the window rolled down . What is amusing is that squashed uncomfortably in the back are the two junior ministers K H Muniyappa and E Ahamed. I wonder when either gentleman last sat in an un-airconditioned Zen. Surely, it must have been before they joined politics!
-Mohan Bhuyan
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