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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!
The Protection of Women against Sexual Harassment Bill was passed by Rajya Sabha yesterday. Prior to this, no legislation specifically addressed the issue of sexual harassment at the workplace. In 1997, the Supreme Court issued directions in Vishakha vs. State of Rajasthan to deal with the issue. The Supreme Court had also recommended that steps be taken to enact a law on the subject. The Bill was introduced in Parliament in 2010 and was passed by the Lok Sabha on September 3, 2012. In order to protect women from harassment, the Bill establishes a mechanism for redressal of complaints related to harassment. Recently, the Verma Committee in its Report on Amendments to Criminal Laws had made recommendations on the Sexual Harassment Bill. In this blog we discuss some of the key issues raised by the Verma Committee with regard to the issue of sexual harassment at the workplace. Internal Committee: The Bill requires the establishment of a committee within organisations to inquire into complaints of sexual harassment. The Committee shall comprise four members: three would be employees of the organisation; and the fourth, a member of an NGO committed to the cause of women. The Verma Committee was of the opinion that in-house dealing of the complaints would dissuade women from filing complaints. It recommended that a separate Employment Tribunal outside the organisation be established to receive and address complaints of sexual harassment. Requirement for conciliation: Once a complaint is made, the Bill requires the complainant to attempt conciliation and settle the matter. Only in the event a settlement cannot be reached, the internal committee of the organisation would inquire into the matter. The Verma Committee was of the opinion that this is in violation of the Supreme Court’s judgment. It noted that in sexual harassment cases, an attempt to conciliate compromises the dignity of the woman. Action during pendency of the case: As per the Bill, a woman may approach the internal committee to seek a transfer for herself or the respondent or a leave to the complainant. The Verma Committee had recommended that till the disposal of the case, the complainant and the respondent should not be compelled to work together. False complaints: The Bill allows the employer to penalise false or malicious complaints as per their service rules. The Committee was of the opinion that this provision was open to abuse. A PRS analysis of the Bill may be accessed here.
