Chugging along brand new tracks
The rail fare hike carries the promise that sound economics not populism would be given primacy in decision-making
The new government has taken the unpopular step of hiking rail fares as part of the hard decisions that Prime Minister Narendra Modi has indicated in the past as essential. The Indian Railways have suffered for much too long with excessive political interference and populist policies that have not only eroded their financial viability, but have had an even more serious impact on the country in terms of losing passenger as well as freight traffic in favour of road transport. Rail transport, its healthy development and modernisation are in the interest of every citizen of the country, and allowing this historically important sector to decline and bleed through political expediency and populism is harmful to the Indian economy. The current developments in Iraq should remind us of the geopolitical fragility of increasing oil imports and India’s growing import dependence, which could reach precarious levels. The largest consumer of liquid petroleum products in India is the road transport sector.
In a presentation made at the highest levels of the UPA government, TERI had brought out through a rigorous modelling exercise that if India continues on a busi- ness as usual path of economic growth at a healthy level, we could in 2031-32 be importing 750 million tonnes of oil and 1,300 million tonnes of coal. In a separate exercise, TERI had also provided a sober assessment of the constraints in production of coal for meeting the projected growth in domestic demand. There are serious boundaries in enhancing coal production. Even the best technologies and the most efficient methods of production will still not allow domestic demand to be met at projected levels under a high growth business as usual scenario. Against this background, the Modi government’s decision to hike rail fares is a move in the right direction. The Railways require large-scale resources for modernisation and improving systems and processes for higher safety.
I visited China for the first time in 1981 when the railway system in that country was clearly way below Indian standards in terms of efficiency and reliability. Today the Chinese Railways have moved light years beyond our static condition. In the ChinaIndia strategic dialogue held in Beijing in March, it was interesting to see that perhaps the most important subject discussed between the two governments was India’s demand for importing high-speed rail technology from China. Trains in Japan have run at high speeds for decades now since the advent of the bullet train. South Korea attained passenger train speeds of 300 kmph almost a decade ago, and China is now part of the same league. Both the Chinese and the French Railways are experimenting with speeds well in excess of 500 kmph, which would compete with air traffic on several routes. The Indian Railways continue to chug along at speeds modestly above the average that was attained 50 years ago.
The importance of the recent rail fare hike is confined not merely to the Indian Railways. It carries the promise that sound economic management and good governance would be given primacy in decision-making over short-term populism and expediency.
A particular issue on which the new government needs to focus attention on is the need for and the means by which the public is convinced on the logic and rationale for hard decisions that are to be taken. It has been found on numerous instances that governments which find innovative ways of generating acceptance of hard choices achieve much more than those that simply take decisions and ram them down the throats of the public. Then the Modi government must create the skills by which it can effectively soften public resistance to hard decisions, before these are announced and implemented.