Rail Budget 2012 will push growth: Vinay Mittal, Chairman, Railway Board
Railway Board
chairman Vinay
Mittal is pleased that his minister
Dinesh
Trivedi gathered enough courage to raise passenger fares and help the
network raise badly needed resources. In an interview with ET's Viraj Desai after the Railway Budget for 2012-13 was presented,
Mittal, the top bureaucrat of Indian Railways, shares his thoughts on various
aspects of the railways. Excerpts:
What do you think are
the top 4 or 5 key takeaways in terms of economics from this budget?
Railways have been bold to at least make a beginning towards recovering cost of
operations. We are a commercial organisation with a lot of social
responsibilities also, so we can't be viewed as just a commercial operation.
Unless you have adequate funds, you cannot augment your services, line capacity
or even remove bottlenecks. It is a self-defeating scenario. This is a budget
which gives money to facilitate growth and take care of modernisation as well
as safety-related issues.
Budget at ET: Budget 2012 | Union
Budget | Railway Budget
2012 | Budget News
The recent round of
hikes in freight has raised a lot of hue and cry from commodity companies. In a
scenario where you are looking at revenue growth of over 27%, don't you think
you would lose out from commodity companies?
The freight hike is not an ad-hoc hike. It has been a well thought out move.
The fact is that even today the input costs are still not being completely
neutralised. If the market is not able to absorb this, we will see what to do
in due course of the year. Commodity companies would only incur a marginal
expense across commodities. Why should railways keep suffering! We are
suffering losses through passenger revenues. I am saying it is not a good idea
to subsidise passenger fares through freight.
Does this mean that
ratio of cross-subsidisation would come down?
Yes, the ratio is likely to come down. I can't tell you though at this moment
how much would it come down.
What are the key
things that would help railway finances?
Our fund-balance has hit rock bottom. But generation of funds through internal
resources would help substantially in the current year. The incremental growth
in passenger traffic and freight revenues would help our finances.
Is it a tall order to achieve
an operating ratio of 84.9%, a 10% reduction in one year? Is there a precedence
of the same?
It is a difficult task but definitely possible. Our operating ratio went down
from 91% in 2004-05 to 84% in the subsequent year and 79% in 2006-07.
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