Trivedi’s Maiden Rail Budget : A nice blend of smart politics and good economics….

The youngest child of a Gujarati family and the Rail Minister, Dinesh Trivedi, did a fairly well job with his debut budget on March 14. This time, after so many years, industry saw a budget that was aimed at the welfare of 14 lakh people of India rather than a few ministers. Right from the start, and till the end, he stressed over hundred times on ‘Safety Concerns’ in the Indian Railways. He proposed, for the first time in Indian history, to set up an independent Railway Safety Authority to parallel the international standards of safety.

Taking the theme of safety to next level, he introduced the need for modernization of Indian railways and proposed setting up of expert group under Sam Pitroda. The group plans to spend Rs 5.6 lakh crore in the modernization of Indian Railways in the next five years.

Amidst such big-ticket plans, the rail minister didn’t miss the silver lining in expectation of gold. Taking a bold step and daring to go against the wishes of his party chief Mamata Banerjee, he raised the passenger fares for the first time in last ten years, aiming to help the government to rein in ballooning fiscal deficit. He also showed his eagerness to ‘bite every possible bullet’ in order to bring down the operating ratio from 95 per cent now to 84.9 per cent in 2012-13 and 74 per cent by 2017. The operating ratio shows the amount spend to earn every single rupee.

However what made him better Rail worker from few of his predecessors was the smart economics he tried to mix with politics. He planned to go slower in expansion for the upcoming fiscal year, paving way for the government to control deficits, inflation as well as give some room to RBI to start reversing the monetary policy.

Moreover, he understood the need to revive the creaky infrastructure of India and hence chalked out an investment plan of USD 1 trillion in the infrastructure sector with half the investment or Rs 25 lakh crore expected from private sector, and remaining Rs 25 lakh crore being planned by the government from its own resources. He desired Rs 14 lakh crore investment from the government in the next ten years to take the Indian Railways ahead of the time.