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The general discussion on the Railway Budget concluded in Parliament this week. During the discussion, several MPs made a reference to two important documents tabled by the Railway Minister in 2009 - the ‘White Paper' on Indian Railways and the 2020 Vision document. The documents provide good insight into the operational and financial performance of Railways over the previous five years. They also throw light on the challenges that confront the Railways today. It emerges that Railways has relied heavily on increasing utilization of existing assets to manage the increase in demand. The system is otherwise severely constrained by lack of adequate capacity. Scenario so far (2004-09) Growth in traffic and earnings Rail transport demand is linked to the growth in GDP. As a result, the two main businesses of Railways – Passenger and Freight – have both seen significant increases in traffic in recent years. Passenger traffic has grown at an average rate of 10% each year. Earnings have increased at a slightly higher pace, implying that most passengers have been spared increases in fare. Standalone, passenger operations have continued to be loss making. Freight traffic has grown too, but at a lower rate of about 7% and unlike the passenger segment, freight fares have increased significantly over these years. Freight forms the backbone of Railways' revenues. Even today, it continues to account for almost two-thirds of total earnings. However, Railways’ market share in freight has decreased steadily over the past few decades - it dropped from 90% in 1950-51 to less than 30% in 2007-08. The main reasons for this decline are high pricing (to subsidize passenger travel) and lack of sufficient infrastructure. Railways are unable to provide time-tabled freight services. In addition, there are no multi-modal logistics parks that could have provided door-to-door cargo services. Infrastructure constraints Since 1950-51, route-kms have increased by just 18% and track-kms by 41%, even though freight and passenger output has gone up almost 12 times. Specific issues include:
The above constraints require investment in network and capacity augmentation, including dedicated freight corridors. Hence, a substantial increase in funding is necessary. The Vision 2020 document planned to deploy Rs 14 lakh crore in the next 10 years towards development of rail infrastructure. Recent trends (as presented in the Budget 2011) This year's budget presented the actual financial performance in 2009-10, the provisional performance in 2010-11 and the targets for 2011-12 (Details can be accessed here). It also highlighted achievements on other metrics, including growth in traffic and augmentation of infrastructure (See 'Status of some key projects proposed in 2010-11'). On financials, 2009-10 was a bad year for Railways. Figures show a high Operating Ratio of 95.3%. Operating Ratio is a metric that compares operating expenses to revenues. A higher ratio indicates lower ability to generate surplus. The 2009-10 Operating Ratio is the highest since 2002. According to the Railways Minister, this can be partly attributed to higher payout in salaries and pension due to implementation of Sixth Pay Commission recommendations. Growth in passenger traffic remained high in 2010-11, at 11%. However, growth in freight traffic slowed down to 2%. Again, passenger fares remained untouched, but freight fares were increased. Railways, in 2011-12, targets an increase of 8% in both passenger and freight traffic. Financials are expected to improve. An amount of Rs. 57,630 crore has been budgeted as net plan outlay for investment in infrastructure. Last year, this figure was Rs 41,426 crore. In her opening remarks during the Budget speech in Parliament, the Minister commented that Railways forms an important backbone of any country. Lets hope it is headed in the right direction!
As the dust settles around the 16th Lok Sabha, attention must now shift to the state assemblies, some of which have been newly constituted like Rajasthan, Chhattisgarh, Madhya Pradesh, Odisha, Andhra Pradesh and the few that will go into elections in the next few months like Maharashtra and Haryana. There are 30 state legislative assemblies not including the newly formed state of Seemandhara. In our federal structure, laws framed by the state assemblies are no less important and deserve the same diligence and debate as laws made by Parliament. A brief look in to the performance of some of our state assemblies reveals that these institutions which form the cornerstones of our democracy need some serious attention. State Assemblies: business hours The current Haryana Legislative Assembly that comes to the end of its five year term in October this year has held 10 sessions since 2009 till March 2014, meeting for a total of 54 days – an average of 11 days per year. In comparison, the Lok Sabha sat for an average of 69 days each year from 2009 to 2014. Among state assemblies, only Nagaland and Arunachal Pradesh sat for fewer days than Haryana. In the same period the Kerala Assembly sat for an average of 50 days per year, while Tamil Nadu Assembly sat for 44 days. In its previous term, the Gujarat Legislative Assembly sat for a total of 157 days – an average of 31 days each year. Similarly, the current Goa Legislative Assembly sat for 24 days in 2012 and for 39 days in 2013. Over the last 10 years, the Assembly sat for an average of 26 days a year. It recorded the highest number of sitting days in the last 10 years, at 39 days. Law making in the states In most states, Bills are passed with little or no discussion. Most Bills are introduced and passed on the last day of each session, which gives Members hardly any opportunity to examine or discuss legislation in detail. Unlike Parliament, where most Bills are referred to a department related standing committee which studies the Bill in greater detail, in most states such committees are non-existent. The exceptions are Kerala which has constituted subject committees for this purpose and states like Goa and Himachal Pradesh where Select Committees are constituted for important Bills. The current Haryana Assembly has passed 129 Bills, all of which were passed on the same day as they were introduced. Upto 23 Bills were passed on a single day, which left hardly any time for substantial discussion. In the twelfth Gujarat Assembly, over 90% of all Bills were passed on the same day as they were introduced. In the Budget Session of 2011, 31 Bills were passed of which 21 were introduced and passed within three sitting days. Of the 40 Bills passed by the Goa Assembly till May 2013, three Bills were referred to Select Committees. Excluding Appropriation Bills, the Assembly passed 32 Bills, which were taken up together for discussion and passing in five days. Almost all Bills were passed within three days of introduction. On average, each Bill was discussed for four minutes. In 2012, the West Bengal Legislative Assembly passed a total of 39 Bills, including Appropriation Bills. Most Bills were passed on the same day they were introduced in the Assembly. In 2011, a total of 23 Bills were passed. On average, five Members participated in the discussions on each Bill. In 2012, the Delhi Legislative Assembly passed 11 Bills. Only one of the 11 Bills was discussed for more than 10 minutes. The performance of the Chhattisgarh and Bihar Vidhan Sabhas follow the same pattern. Over the last few years, some assemblies such as Andhra Pradesh, Rajasthan and Haryana have taken some positive steps which include setting up subject committees and permitting live telecast of Assembly proceedings. Every legislator- in Parliament and the states - is accountable to his voter. Weak democratic institutions deprive legislators of their right to oversee the government as enshrined in the Constitution. Inadequate number of sitting days, lack of discussion on Bills, and passing of the Budget and demands for grants without discussion are symptoms of institutional ennui and do not do justice to the enormous import of these legislative bodies. Serious thought and public debate is needed to reinvigorate these ‘temples of democracy’ and provide elected representatives with the opportunity to exercise their right to legislative scrutiny, hold government to account, and represent their constituents.
