Gist of RSTV – The Big Picture: Can compensating loss making routes change railway fortunes?

Rajya Sabha TV progammes like ‘The Big Picture’, ‘In Depth’ and ‘India’s World’ are important for UPSC preparation because they feature discussions of current affairs events and topics which make headlines in the country. The discussions give both the pros and cons of a topic and candidates can take useful insights from them for the civil service exam.

Background

  • Prime Minister’s Office has asked the ministry of finance to fund losses incurred by the railways in operating non-profitable lines in strategic areas and backward areas.
  • This intervention by the PMO was due to the ongoing tussle between the railways and the finance ministry. The tussle began after the merging of the railway budget with the union budget as the finance ministry discontinued the practice of providing the annual subsidy to the railways.
  • This decision comes as a relief to the railways which feels that its social service obligation of running trains in non-profitable areas should be funded by the central government.
  • Now the big question is will this move brings in a reversal in the railway fortunes? 

Analysis 

  • The reimbursing of losses suffered by the railways due to its social service obligations should have been done long back. After the railway budget merger, it should have been the responsibility of finance ministry to ensure running of trains in the strategic areas and backward areas.
  • It should be done not only in strategic and backward areas but across the nation wherever the prices are subsidized.
  • Railways offer variety of subsidies both in passenger and tariff fares which is hurting the commercial viability of railways.
  • The real extent of and the impact of all the subsidies provided by the railways should be gauged through sound commercial accounting.
  • A robust regulatory mechanism should be put in place to check the losses suffered by railways and the question of reimbursement to avoid any further tussles.
  • The need of the hour is a systematic overhaul of railways through a holistic and not a piecemeal approach.
  • There is an urgent need to review the subsidy regime and the fare structure.
  • The possibility of bringing railways into concurrent list should be debated to further the participation of state governments in railway projects. State governments should be given the freedom to decide on certain railway projects and also the freedom to fix fares etc.

Conclusion

  • Railways are vital for the country’s overall health. Railways in India have a multidimensional role to play such as social, economic, strategic, mobility, industrial development etc. Therefore, the railway policies should be integrated with other aspects of growth and development.
  • There is an urgent need to revisit the railway policies. There is a need to usher in transparent policy regime in railways which is mainly populist in the current scenario. Political interventions and considerations should be minimalized in the railway sector.
  • Subsidies are not the only problem faced by the railways. Railways should be rejuvenated with better utilization of the resources, further investments and further expansion.

UPSC Mains Practice Questions
  1. Discuss the role of the railways in the development of India. Do you think privatization is a good step to improve the services provided by the railways?

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