Mamata chugs on populist track

NEW DELHI: Populism prevailed over economics once again as railway minister Mamata Banerjee presented to Parliament on Friday a railway budget driven more by political considerations than the financial constraints of the railways, which are already in the red but for the window-dressing resorted to by her advisers. By choosing to spare passengers of all classes from a fare hike, increasing freight charges, albeit marginally, introducing 19 new trains without caring for the already saturated route capacity and taking up at least 10 unviable projects, Banerjee has only followed the beaten track taken by the previous governments, whom she criticised for throwing the railways off the track.In fact, the modest attempts initiated by her predecessor Nitish Kumar towards rationalising the tariff structure and giving up economically unviable projects seem to have been reversed. Railway Board member (traffic) Shanti Narain said the increase in freight charges to mop up an additional Rs 600 crore would not be counter-productive for the railways which have been losing traffic to roads. He said the average increase worked out to about three per cent and the impact on inflation would be ``negligible''''. For bulk-transport commodities like coal, steel and cement, the hike is two per cent. For most other commodities, it is five per cent. For items like chemical manures, livestock and oilseeds, it is 15 to 48 per cent. Urea, salt, foodgrain, sugar, edible oils, fruits, vegetables, kerosene and cooking gas have been exempted from the hike -- another populist imprint on the budget. In case of fertilisers, for which freight charges have been increased, the railways have simply passed on the subsidy burden to the government. Parcel rates for all items, except medicines, newspapers and magazines, have been increased by seven per cent. The new rates take effect from April 1. Finance minister Yashwant Sinha''s repeated assertions about the need to ``bite the bullet'''' seem to have made no impact on his firebrand colleague in the railway ministry. Even Prime Minister Vajpayee on Friday spoke of the need for the ``bitter pill''''. While these prescriptions would mean a drastic cut in subsidies, Banerjee has actually increased the cross-subsidy from freight traffic to passenger traffic from Rs 3,000 crore during the current fiscal to Rs 3,150 crore in 2000-01.