RAILWAYS

'I have the blessings of aam aadmi'

Q&A: Railway Minister Lalu Prasad
Saubhadro Chatterji / New Delhi February 14, 2009, 1:32 IST

Railway Minister Lalu Prasad was much in demand on Friday, so much so that his press conference spilled
over into the corridors of Parliament. Saubhadro Chatterji caught up with him.

You have presented five Railway Budgets. What do you consider your best achievement so far?
The turnaround of the Indian Railways. Before the UPA came to power, the railways had failed to pay
dividend to the government. In fact, they did not have enough money to even renovate their assets. But I
have earned the faith of the country. Today, Indian Railways has generated surplus revenue. I also have the
blessings of the ‘aam aadmi’. This is my biggest achievement.

How will the economic slowdown hit the railways’ growth?

It has already hit us. We could have generated Rs 1 lakh crore of surplus revenue during these five years if
the economic slowdown hadn’t happened. We will lose surplus revenue amounting to Rs 10,000 crore this
year alone. During December and January, the meltdown affected our freight revenues. But the situation has
improved slightly now.

Why didn’t you cut freight rates to combat recession?

Koi problem nahi (there is no problem). Dedicated freight corridors are coming up. As soon as these are
completed, goods that go by road and face regular accidents will come to us. Sixty per cent of the road
freight traffic will come to the railways.

You could have reduced passenger fares a little more and passed on the full benefit of the lower
prices of diesel to the passengers.
During my entire tenure, I have reduced second-class fares by Rs 4 for distances less than 50 km. For
distances above 50 km, there has been a reduction of 7 per cent. In AC 3-tier, fares have been reduced by
30 per cent, while in AC 2-tier, there has been a 20 per cent reduction. In this budget too, I have reduced the
fares. Had it been anyone else in my position, the fares would have gone up. I too faced a lot of pressure but
I did it on my whim. I feel proud of my decisions.

Today, Indian Railways has one of the cheapest fare structures in the world. This has happened despite the
increasing costs. When P Chidambaram was finance minister, he imposed service tax on railway food. I told
him not to do it. How would the contractors maintain the quality of food with increased costs? Many people
suggested I increase the prices of food. How could I do it? I told the contractors to readjust the menu. They
used to give potato chips and those biscuit-type sticks (breadsticks) with soup. I told them, ‘Yeh aaltu-faaltu
sab hatao (get rid of these inessentials). Give sabzi and dal.’ I come from Bihar. I know the nutrition value of
sabzi and dal. You can see that the quality has been maintained.

Will you be able to meet the deadline of the freight corridor project?
Of course. We are not lagging behind and started well within the stipulated time. We have already
completed discussions with the World Bank and Asian Development Bank. After we complete the first
phase, we will take up the second phase of connecting Mumbai with Chennai and Chennai with Kolkata.

Security remains a key issue.

We are giving utmost importance to it. It is impossible to check every piece of luggage manually. If the
security guards ask every passenger to open his luggage, people will start fighting. Therefore, we are using
sniffer dogs and installing X-ray machines in consultation with the home ministry.
Anything that you couldn’t achieve?
Sab kar diya, sab kar diya (I did everything).

No slowdown blues for freight traffic

BS Reporter / New Delhi February 14, 2009, 1:26 IST

FREIGHT: For 2009-10, the target is Rs 59,059 crore.

Indian Railways on Friday projected an 8.7 per cent increase in freight earnings for 2009-10, despite the
global economic downturn adversely affecting many domestic industries that use the rail network to
transport their raw materials and finished products.

In the Interim Railway Budget presented to Parliament on Friday, Railway Minister Lalu Prasad did not tinker
with the freight rates and instead assured better services to customers.

However, in the current fiscal, the railways have revised upwards their earnings from goods traffic. They now
expect freight earnings to grow 14 per cent as against the earlier projection of 11 per cent.

This is despite acknowledging a slowdown in goods transport in October-November 2008. “The situation in
December 2008 and January 2009 indicates some improvement and we are not only hopeful but also
confident that the Budget targets for goods earnings set for the fiscal will be surpassed,” the minister said.

India’s economy is projected to grow at 7.l per cent in 2008-09, substantially lower than the 9 per cent-plus
growth for the previous three financial years.

But analysts say the Indian Railways will be able to meet its target, as its freight earnings grow faster than
the GDP rate. “Non-reduction of freight rates will help it achieve the revenue target for next year. Even if the
economy grows by 5.5-6.5 per cent in the next fiscal, the railways’ targets will be achieved as there will be
enough demand for key goods it transports — coal, iron and steel and fertilisers,” said Amrit Pandurangi,
leader (transportation and infrastructure), PricewaterhouseCoopers.

The railways have projected an 8.7 per cent increase in freight earnings for 2009-10 at Rs 59,059 crore,
which is an optimistic outlook as the economy is expected to grow around 7 per cent during the period.
Freight earnings in the current fiscal are estimated to grow at 14.4 per cent at Rs 54,294 crore.

Freight loading is expected to increase 7 per cent at 910 million tones (MT) in the 2009-10 fiscal, compared
with 850 MT in the current fiscal. Freight traffic grew by 9 per cent in 2007-08 and is expected to grow by 7
per cent in 2008-09.

The estimate of freight earnings for the current fiscal was raised by 3 per cent to Rs 54,293 crore from the
Budget estimate of Rs 52,700 crore, despite freight movement in October and November 2008 was
adversely impact by the economic slowdown. There was a steep reduction in iron ore for export and
container traffic. The growth rate of steel traffic also declined.

Freight earnings in April-December 2008 increased by 14 per cent at Rs 38,093 crore. “Based on the
present trend, we have increased the targets for goods earnings for 2008-09 by Rs 1,593 crore,” the railway
minister added. The freight loading target for the current year was retained at the Budget estimate of 850
MT.
In the last five years, the railways have stepped up the annual growth rate of freight loading from an average
3 per cent during the 1990s to an average of 8 per cent, which helped the public sector behemoth to wrest
some market share in transportation of steel and cement sectors.