10 Yardsticks To Judge Rail Minister Suresh Prabhu’s Record In 2015-16

In a couple of hours from now, we will hear Railway Minister Suresh Prabhu deliver his second budget speech. Since economic revival and job creation depend crucially on two key infrastructure ministries – railways and road transport, run by Prabhu and Nitin Gadkari respectively – we will get early answers on how one of them has fared today (25 February).

The questions we need answers for are the following:

#1: Has Prabhu decisively broken the cycle of underinvestment in railways, and by how much in his first year?

#2: Has Prabhu put the Indian Railways on the path to economic sustainability, where operating margins are high enough to finance growth and investment?

#3: Has the quality of user experience – both passengers and freight users – improved? What are the metrics being used to measure improvements in customer satisfaction?

#4: Has safety started improving, by a steady reduction in man-made and unexpected accidents?

These are not goals I have set for Prabhu, but those he has set for himself, and so this is how we should measure his performance.

While actual results may vary depending on economic conditions and the climate for growth, which has not improved, we thus need to add six more parameters to judge Prabhu’s performance, and how short he may have fallen from them. So here are the six other yardsticks that are more specific than the broader goals above, and some of them are about measuring the current’ year’s performance.

#5: Given that the economy has not gathered steam, how much will Prabhu fall short of his ambitious freight traffic earnings target of Rs 1,21,423 crore in 2015-16, of which only one month remains? How much will he fall short of the planned increase in freight movement by 85 million tonnes? Any shortfall in excess of a third of the increased target is not a happy augury.

#6: How far away will Prabhu be from his targeted operational ratio of 88.5 percent, from 91.8 percent in the year before? Minister of State for Railways Manoj Sinha has already told Swarajya in a pre-budget interview that the target will be missed; the question is how big is the slippage? If the ratio is worse than in 2014-15, that would be a major blow for the railways’ economic sustainability, especially since next year (2016-17) the railways will face the additional burden of the Seventh Pay Commission. Prabhu had pencilled in a growth of gross traffic receipts by 15.3 percent while containing ordinary working expenses to 9.6 percent; while he could have contained the latter, it is doubtful if he has managed the former in 2015-16.

#7: Crucially, since the idea is to make the Indian Railways an engine of growth, Prabhu will be judged by whether he has at least achieved his investment goals. In 2015-16, he had pencilled in a plan investment of Rs 1,00,011 crore, up 52 percent from the previous year. If the slippage is more 20 percent, it would be a let-down.

#8: Another investment target is Rs 8,56,020 crore over five years. How much of this target has been achieved in 2015-16, when resources are admittedly low and investment may be slow to pick-up? If he hasn’t covered even 10-12 percent of the distance, he is unlikely to make the larger target by the terminal year of 2019-20.

#9: Train speeds are another key measurement area for railway performance. Prabhu promised an increase in freight train speeds to 100 km for empty trains and 75 for loaded ones, though this is not for one year. On nine major railway corridors, he promised an increase in passenger train speeds to 160-200 from 110-130. The only thing to measure this year is a simple one: has the average speed at least risen by 5 km from the year before? One hopes Prabhu has the numbers to enlighten us on this.

#10: Last year, Prabhu made a unique departure from the past by announcing no new projects, stating that completing existing projects is more important than just blindly announcing new ones and grossly underfunding them. He said the payoffs from expanding existing lines would be greater than creating new ones. He said: “We intend to fast track the sanctioned works on 7,000 km of double/third/fourth lines and commission 1,200 km in 2015-16 at an investment of Rs 8,686 crore. We also intend commissioning 800 km of gauge conversion. Additionally, we have sanctioned 77 projects covering 9,400 km of doubling/tripling/quadrupling works along with their electrification at a total cost of Rs 96,182 crore which is over 2,700 percent higher in terms of amount sanctioned in 2013-14, 2014-15 being a Plan holiday.”

Put another way, Prabhu promised a year of consolidation and changes in a positive direction where delivery would be more important than promise. His budget speech today should be judged from this standpoint.