Shahi Tharoo writes: In the days of the British Raj, when the railway budget rivaled that of the rest of the Indian government, the Parliament listened rapt to railway detials. Railway revenues today, at $23 billion, no longer dwarf the country’s budget, which now stands at some $268 billion. But India’s railways still produce other mind-boggling figures: 23 million passengers are transported daily (over eight billion per year, more than the world’s entire population) on 12,617 trains connecting 7,172 stations across a 65,000-kilometer (40,000-mile) network. And, with 1.31 million employees, the railways are the country’s biggest enterprise.
India’s trains carry four times the number of passengers as China’s, despite covering only half as many kilometers, but still lose about $7 billion annually. A succession of railway ministers, viewing the trains as poor people’s only affordable means of transport, have refused to raise passenger fares, squeezing freight instead. This has proved popular with voters but disastrous for the country.
Though freight transport still accounts for 67% of railway revenues, with 2.65 million tons carried every day, the higher fares needed to subsidize passengers have deterred shippers. As a result, the share of freight carried across India by rail has declined from 89% in 1950-1951 to 31% today.
Instead, an increasing volume of goods is shipped by road, choking India’s narrow highways and spewing toxic pollutants into the country’s increasingly unbreathable air.
Making matters worse, politicians have continued to add trains to please various constituencies – but without adding track. Indeed, owing to land constraints, India has laid only 12,000 kilometers of rail track since independence in 1947, adding to the 53,000 left behind by the British. As a result, several lines are operating beyond their capacity, creating long delays.
But perhaps the biggest problem is how dangerous the railways are. Aging rails, tired coaches, old-fashioned signals, and level crossings dating back to the nineteenth century combine with human error to take dozens of lives every year.
Yet the railway ministers continue to insist on their populist approach. With the government losing $4.5 billion every year by subsidizing passenger fares, it has little money to spend on upgrading infrastructure, improving safety standards, or speeding up the trains. As a result, the railways run out of money before running out of plans. In the last 30 years, only 317 of 676 projects sanctioned by Parliament have been completed, and it is difficult to imagine how the railways will acquire the estimated $30 billion needed to complete the remaining 359 projects.
A technocratic new railway minister, Suresh Prabhu, has once again left passenger fares untouched and raised freight rates. Though, unlike his predecessors, he has resisted the temptation to announce any new trains, his plans for India’s railways remain inadequate.
Prabhu’s most impressive promise – to raise $140 billion from market lenders – is also his most problematic, as he has failed to clarify how exactly the railways would repay the loans. Given how high interest rates would have to be to attract investors, this will be no easy feat.
It is far from clear how Prabhu’s grand vision of a safer, cleaner, and speedier Indian railway system will be achieved in practice. The railway minister has created a dream budget –though “pipe dream” might be a more accurate description.
