Hey Prabhu! Save Indian Railways, save the nation.

Pratim Ranjan Bose

In Hindi ‘Prabhu’ means almighty. But, as the India’s new railway minister Suresh Prabhu finds it, even the all-powerful cannot set things right in Indian Railways which has been left bloodless due to decades of abuse in the hands of shortsighted politicians.

“I thought, hey Prabhu how will it happen? Prabhu didn’t answer. So this Prabhu thought why we do something?” the railway minister said in his maiden budget speech on February 27.

I knew Suresh Prabhu, during his days as the power minister in the Atal Bihari Vajpayee cabinet (1998-2004). I was not alone. Probably all the newspaper reporters, covering developments in the power sector across the country, knew him equally well. To his credit, Prabhu could recognize each one of us, if not by name, then surely by face.

As one of the veterans in the profession, I came across many high profile Central ministers who were cordial to the media. Murli Deora and Jairam Ramesh of the Congress possessed such qualities.

But, Prabhu was a little different. He had a vision to improve the fundamentals of the electricity sector and made sincere attempts to make it a reality. 

Those were the days when the power sector was suffering from the legacy of the control-economy era. And, Prabhu had the unenviable task of reforming it in the face of stiff opposition from the State governments.

A minister of high caliber

And, Prabhu did it in style, until Bal Thackeray, the Shiv Sena supremo and his the then political boss, removed him in 2002, for reasons that had nothing to do with his competence or the lack of it.

This is not to suggest that everything Prabhu did was a resounding success. In 2001, he introduced the debt-securitisation programme to clean the balance-sheet of State government-run utilities. He thought it would prevent politics from meddling with the viability of the electricity distribution trade.

He was wrong. Many States went on offering free lunches to electricity consumers (piling up nearly $ 33 billion sticky assets at commercial banks). Aam Admi (AAP) government’s recent announcements in Delhi proves yet again that populist politics cannot be done away with so soon. 

However, Prabhu made a mark in most of his initiatives which have changed the rules of the game of Indian power sector altother. He was the guiding force behind the Electricity Act, 2003 that open doors of the entire cross section of electricity business to competition under strict regulatory regime.

Naturally, when the Prime Minister Narendra Modi offered him (now a member of the ruling BJP) cabinet berth as the Rail Minister, three months ago, I was excited.

The big challenge

It meant that the Prime Minister has accepted the challenge of reforming the railways – a task that no Indian government dared to attempt in the past two decades of liberal economic regime. 

And, the Prime Minister had picked someone with proven abilities.

The job at hand to bring Indian Railways - the fulcrum of Indian economy - back on track is formidable though.

The Railways was perhaps the worst victim of coalition politics at the Centre between 1989 and 2014.

With 1.42 million employees, country-wide spread, and separate budget proposals – the Railways offers unmatched opportunities to politicians to run a fiefdom. And, the smaller yet critical regional allies were always quick to grab this opportunity. 

The result is an abject sacrifice of national interest. Instead of trying and offering last-mile connectivity to the mining sector; the Railways was interested in setting up production units in UP or Bihar! While power generation was suffering due to slow movement of coal; the Railway Board turned its focus on acquiring a loss-making media house in Bengal.

There are numerous such instances where narrow political agendas of regional satraps got the better of the growth aspiration of a country of 1.2 billion.

Time for change

Three months are not time enough to overhaul a system that was raped for decades. But, knowing Prabhu’s style he had done his homework.

On Thursday, he did not present a budget. He, in fact, put across some basic numbers, on earnings and expenditure, as is mandatory. Not more than that. Instead, he used the platform to introduce us, with the first draft of his plan to inject fresh blood into the system. (BUDGET HIGHLIGHTS)

He is looking forward to investing $140 billion (Rs 8,50,000) towards capacity building and modernisation. This is peanut when compared with China’s annual investment plans.

But, for a country that has long been pursing a need-based development model in infrastructure creation, here is a milestone policy shift towards creation of surplus capacities. If Prabhu succeeds, India will no more have to focus on keeping the factor cost of infrastructure creation low. Instead, it will offer consumers varied choices.

Indeed, choices do come at a higher face-value. But the improved efficiency in goods and passenger movement should put India firmly on a high growth path, as it was evident in China in the past couple of decades.

But can Prabhu guide us to this goal? It appears he will, for Modi lends the crucial political support that Narsimha Rao once extended to Manmohan Singh in ending the licence raj in 1991.

***