Indian Railways: A boon for the economy
As soon as the Union Budget for 2013-14 was tabled in the Parliament on 28th February, all the eyeballs shifted completely from the Railway Budget for the year 2013-14, announced just two days back on 26th of February.
The promise by the Finance Minister regarding the reduction of the ballooning Fiscal and Current Account Deficit from the exiting levels is ruling the roost till the day.
If we analyze in detail, we would find that some of the announcements in the Railway Budget find profound association with the General Budget as well.
Without going into lengthy details, we would discuss in brief two of the main announcements.
The Fuel Adjustment Component ( FAC) introduced this time around is a hailing step for sure. It would ensure that the Indian Railways (IR) would not compromise anymore on the spiraling fuel (diesel) prices.
Fuel composes around 17% of the total operation cost of IR.
It has been long witnessed that IR operated on losses and could not amplify its tariff amid resistance from opposition benches and even allies like TMC. Now that FAC has been introduced in freight tariff (atleast), the revenues are bound to swell up by Rs 4,200 crore. The reason being freight tariff charges have been increased by 6% from the current level.
Although, IR would itself bear all the escalation in the fuel cost in passenger traffic. This figure amounts to around 850 crore.
The best part is that FAC is dynamic in nature and charges would be adjusted relatively with any increase or decrease in the fuel prices.
Therefore, improvement in the present financial state of IR means increase in its revenue. Railways being the largest source of employment in India could also play a role of loan lender to the national exchequer. Any increase in revenue would not only increase employment opportunities but also lead to development of more avenues of income for the national economy.
Secondly, Mahatma Gandhi National Rural Employment Guarantee Program (MNREGA) also finds a mention in the Railway Budget of 2013-14.
This is a very welcome step. Considering the importance of the scheme to the rural areas, it is always certain that MNREGA would never lose on funds, no matter which political party is at the helm of affairs.
The rural areas of the country always act as the deciding factor to the formation of the government in the union elections. Therefore, linking IR with MNREGA would ensure that more employment could be generated for residents of the rural area.
The funds sanctioned in Union Budget for MNREGA could be used effectively for the betterment of IR and further improvement in railways infrastructure would only boom our economy ultimately.
Though, it is still to be seen if the announcements find proper implementation on the ground level as well. In case they do, then nothing can prevent IR from fuelling further growth into our economy for the years to come.