Railway Budget 2016

I eagerly await Railway Budget every year. Though I keep telling myself, Railways does not deserve a separate budget, but the old colonial ritual continues and frankly, I am not complaining by the extra attention Railways get as a result in the parliament.

This year, the expectations were huge. Mr. Prabhu has been one of the few Railway Ministers who has been working hard behind the scenes and not trying to take credit for all populist decisions. Indeed many of the decisions of Railways under his leadership has been anything but popular. While we, the railfans, have criticized some of his decisions, but mostly, we have recognized that he is looking at the medium to long term revival of Indian Railways. We were hoping he will share with us his vision on how to take the huge transporter forward, and he has not disappointed us. To be more precise, he has many great points in his speech, though we have seen that sometimes the devil is in the details.

First, the disappointments. The operating ratio is projected to be 92, which is terrible. Yes, it is partly due to 7th pay commission. But any which way you look at it, this really sucks. And we know historically that the final ratio is worse than what one projects in the budget. If this is the best you could do, why did you not raise fares. Several good intentioned Railway ministers in the past have talked about increasing the non-tariff revenues, but it has never been realized. You can't increase the cost of food any more than you can increase the fares. You can't increase the cost of retiring rooms and in any case, that is hardly any income. You can't have too many advertisements on the coaches without people crying foul. Every Railway minister has talked about exploiting space around stations in the big cities. Hasn't happened and there are reasons for that. So, I am convinced that 92 will only get worse, but even if it doesn't, it is terrible to begin with.

I know with Diesel costs being significantly lower, it was difficult to increase fares. And a lot has already been done in the last few months outside the budget - increase in cancellation charges, more Tatkal seats, more dynamic pricing seats, etc. Even this time, my friends in Railways tell me that the plan is to increase the number of Tatkal seats even more and run more and more trains on dynamic pricing. But I think it was important to also raise the base fares. And this time, it could have been sold politically by arguing that he has proposed so many improvements in passenger services.

The second disappointment was the announcement that NAIR will be converted to first Railway University. The earlier announcement was for setting up only one Railway University, in Vadodara, and it was said that NAIR campus will be temporary home before they can build a campus elsewhere. Today's announcement is faulty on two counts. One, converting a purely training place to a university indicates that perhaps Railways is not emphasizing the research and development aspect. There is such a huge need to do R&D in railway related topics in the country, and one was really hoping that Railway University will take the lead. The second issue is that the announcement indicates that in future, Railways might want to convert their other training centers into universities. I think there is a space for both training on one hand, and education and R&D on the other. To top it all, there is no announcement on when it will start and what will be the structure of the university.

I am happy to see a reference to Vikalp in the speech and an announcement that alternate train accommodation in specific trains will be provided. I take it as that in future, when I make a waitlisted booking, it would be possible to specify which is the alternate train I would like to consider. This is what I had said in my earlier blog about Vikalp that without allowing specific alternative train, it is really of very little use. Railways seem to have figured that Vikalp wasn't a big success.

Monetizing soft assets is great, as is monetizing infrastructure, and all other "hard" assets. He specifically mentions in his speech that privacy of the passengers will be protected, but I remain concerned about that. I hope they will only "sell" statistical data. But the comment about their allowing free access to enquiry is being exploited by other private players displayed a lack of understanding of the issues. What stops Indian Railways to come up with a site better than erail or railinfo, etc.

The overdrive to do electrification was a bit disappointing. If we have been doing electrification at a slower pace, it is usually due to a strong rivalry between pro-electric and pro-diesel lobbies. And both lobbies have their strong arguments. Most of the trunk routes (both for passengers as well as for goods traffic) have been electrified, and it is not obvious whether in the remaining system, electrification is so profitable an investment compared to other needs like doubling or improving signaling and communication.

Booking of retiring rooms on an hourly basis is a great idea and something that I have written about in the past. (I have argued that Railways has the strongest position in overnight travel market. And if Railways can provide a clean place to quickly get ready in the morning without having to pay for a full day's rental, it can fend off competition with other modes - both air, and the sleeper buses.) Of course, devil is in the details. How will this work. Can I book a specific hour in advance. If yes, what happens when the train is late. If no, what happens when several people queue up in the morning. Who gets the room first. I hope they will also create sufficient capacity or even get into a deal with nearby hotels to offer the service to a larger customer base.

The biggest announcement to me was an attempt to reorganize Railway Board. It has been talked about for as long as I remember, a few decades at the very least, but inter-cadre rivalries within Railways are difficult to handle. I do hope that we can have a restructuring done at the top level to make it more responsive to markets and customers, and Mr. Prabhu is best placed to carry it out. Not only he has the credibility and intellect, but also the trust of the PMO.

There were other announcements which have been made in the past one year but had been consolidated in the budget speech. The partnership with states to invest part of the cost in building infrastructure. Raising of funds from LIC and market in general, I hope all of it is not from government controlled sources, which as we know can be controlled, and have resulted in huge NPAs for our nationalized banks. PPP model for a lot of investments. Things which have been said again and again, but there appears to be hope that Railways now understand how to convert these intentions into successful plans.

The best part of the budget was kept for the last. I am not sure how many would appreciate the import of the seven missions, but they really have the potential of changing the face of transportation in India. Some of them are more ambitious than what seem possible in today's environment, but not impossible goals, and that is how these things should be. You should exert the pressure on the work force to do slight beyond what seemed the limit of possibility.

I don't know why all the great announcements were made at the end, but I am also very excited about the data analysis part and having a 50 crore fund to support innovations and start ups. I hope he will continue to encourage Indian Railways to interact with academia as he has done in the past year.

Overall, a lot of promise, a lot of new ideas, a lot of initiatives, a lot of hope.

Railways discourages online reservation

There has been a flurry of activities ever since Mr. Suresh Prabhu has become the Railway Minister, mostly positive. But there are things being done which are so stupid and idiotic that one wonders what is going on in the Ministry. The latest stupidity is a new rule which says that one can book at most 6 tickets online in a month. (Media reports: The Hindu, Hindustan Times, and Business Standard.)

While Prime Minister Modi keeps talking about Digital India and Ease of doing business, Railways Ministry is living in a time warp, and is coming up with newer schemes to encourage paper tickets at the PRS counters, making it difficult for travelers. Of course, travelers are smart people too. And they try to bypass these difficulties by doing things, which Railways consider illegal (like having multiple IDs on IRCTC portal), and then Railways start claiming that since there is so much of illegal activity happening, they will put even more restrictions and make it even more difficult for genuine passengers.

There was a time when one could book 10 tickets in a month, not counting the tickets that were canceled. This posed a bit of difficulty for people like me. I was, in those days, traveling every weekend to meet the family, and sometimes needed to book alternate reservation, if the preferred train was giving me waitlisted ticket only. Sometimes, the travel would need to be changed from Friday evening to Saturday evening, and I would not have any means of booking it online since I would have exhausted the quota of 10 tickets. For me, the quota of 10 tickets was a serious problem, since one weekend visit required three tickets - Jaipur to New Delhi, New Delhi to Kanpur, and then Kanpur to Jaipur. So at times, I will take the overnight Volvo sleeper bus, and sometimes I will take flights. These were easier options than to go to the station to buy a paper ticket.

They made it much worse about 6 years ago when they started counting canceled tickets also within the limit of 10 tickets. Now, one had to be really careful, particularly for such weekend travelers and particularly in those months where there are 5 weekends. Even otherwise, there have been several months when I have had to undertake more than 10 rail journeys for official purposes and/or family emergencies like death in the family.

The argument of the Railways is that only 10% of the users book more than 6 tickets. But 10% of the users is a LARGE number. Is there any business in the world which will work really hard to find ways to make it inconvenient for its most loyal customers. Indian Railways is doing exactly that. Those who are booking more than 6 tickets a month are the most loyal customers, and only a small fraction of them are touts. And this restriction only means that professional touts need more SIM cards. First they stopped Frequent Railway Travel Card. Then they started restrictions on number of tickets in various time slots, number of Tatkal tickets in a day, number of connections from an IP address, and so on. And now this.

Everything that Railways does these days is keeping in view that touts are a huge problem, and apparently, there are only touts in the system, and all passengers go to touts only. It is like in my sector (higher education), all policies are made with the assumption that only coaching classes exist in the country and there are no genuine students outside those classes. Of course, it is possible that the real issue may not be touts, but the pressure from unions. IRCTC is continuing to increase its market share, and PRS counters are not seeing as many foot falls. I am sure the unions are worried about such a situation and would like to put pressure on the Ministry to do something, anything, to ensure that more people come to PRS counters. Otherwise, their numbers will go down over a period of time. And no union would like reduction in work of its members

Railways is just making a joke out of Digital India and Ease of doing business, and in that sense I see a conflict between PMO and Rail Bhavan. I hope someone in PMO points this out to Rail Bhavan. Ideally, they should put an extra charge for paper ticket instead of an extra charge for online ticket, and over a period of time, keep moving towards more and more e-tickets. Issuing paper tickets cost much more than issuing electronic tickets and therefore, all transporters in the world are moving to e-tickets.

There is another possibility as to why Railways is doing this. The basic problem that Railways has faced for decades is that the demand is more than supply. This has been handled by following the policy of First-come-first-served for all these years, with, of course, VIP quotas for those connected. For the last decade or so, the policy has shifted to having 80% capacity sold on first-come-first-served basis, and 20% capacity sold at a higher price, even dynamic price. The higher price ensures that the demand reduces as many people find it worthwhile to travel by car/buses/airlines. And this generates more revenue for Railways which will be helpful in increasing the supply in the longer term. However, the demand continues to outstrip supplies, and the policy to reduce demand by increasing the price has not been liked by people used to subsidy even in AC1 class. So how do they reduce demand. Well, make traveling in Railways so painful that people will voluntarily move to other modes of transport, and we can match demand and supply.  Everyone can live happily ever after. The airlines are happy. The bus transporters are happy. The taxi drivers are happy. Only the railfans like us are unhappy. But who cares for this breed anyway.

I hope Railways Minister will try to identify officers who are working to derail his initiatives by doing such mischief and transfer them to places where they will be harmless.

The Odd is Odd and the Even is Even, the Twain shall never meet

Moving into Delhi a few months ago is definitely making me a political animal. Never bothered about things other than education and railways, but with Delhi High Court declaring that we all live in a gas chamber, it is difficult not to comment on the most pressing problem of the day.

So the government comes out with this plan of Odd numbered vehicles running on some days and Even numbered vehicles running on some other days, claiming that it would reduce the number of vehicles on the road by 50 percent. This really shook me. I have always believed that a ten year old is better at making policies than the activists or bureaucrats. He knows how to count.

The initial media coverage mentioned that this would apply to only personal vehicles and not commercial vehicles. The reason for exempting commercial vehicles was obvious. You can tell a person to walk or take a Metro. But you can't tell a taxi driver to go hungry every alternate day. If half the buses can not run, then there is an obvious problem with the scheme. And if commercial vehicles are reduced by half, would we get all the supplies that we need in the city. Lately the media is silent on this, but is pointing out the resolve to include government vehicles in the odd-even system.

If we assume that commercial vehicles will be allowed every day at all times, then would we really have fifty percent less vehicles on the road. Of course, no one has reasonable quality data, but the perceptions are that commercial vehicles make 10-12 trips per day, while the private vehicles make less than 2 trips per day on an average. By curbing private vehicles on 3 days a week, the reduction in traffic would be substantially less than 50 percent. (A ten year old can figure this out. Our activists can not.)

Some people have more than one vehicles. They will now have to remember to take out the right vehicle in the morning. If they aren't careful about the date, they will make the Government richer. Some other will buy new vehicles. In fact, the primary beneficiary of this odd-even game will be Tata Nano. As a second car, this is a great value for money. We are also hearing about exemptions - single women, for example, may be allowed to use the cars of both numbers at all times. Makes it easier for many couples. The husband take the "right" car for the day, while the wife drives the "wrong" car. We are relaxing it in the early morning and late evening. So I can drop my kids to school in the morning every day, but can only pick them up on alternate days. And I am not even talking about the medical emergencies. Of course, I can see that if such a plan is implemented, then people like us, who do use public transport on a lot of occasions, will certainly not use public transport on the days that our car is allowed. It is already bad and just a few percentage more traffic on public transport will make it too bad for us.

So the following is likely to happen:
1. People with multiple cars just take out the right car for the day.
2. People buy another vehicle.
3. Some trips are replaced by taxi trips.
4. Some trips are advanced to early morning, or late evening.
5. Some work gets pushed to Sundays when all vehicles are allowed.

My guess would be that the reduction in traffic due to people shifting to public transport or due to car pooling would be no more than 10-15%, and some of this traffic would have shifted to low pollution vehicle to high pollution vehicle. So the major pollution control comes not from less miles covered by cars, but because of reduced congestion on the road and smooth traffic. (Again, unfortunately, no quality data exists in public domain. It makes it difficult to evaluate the policy options.)

But, as the supporters are arguing - we are in an emergency situation, and we need quick solutions. Can not wait for studies, data collection, and so on. Of course, we don't even need to know the obvious facts. When this was announced, some elated activists pointed out that this was working well in Beijing, our closest foreign competition. (We have good "Made in India" competition - 13 of the 20 most polluted cities of the world are in India. But the foreign craze means that we look for our foreign competitors only.) And it so happened that as I write this blog article, Beijing indeed has enforced the odd-even rule for THREE days. The activists forgot to tell us that this is only an emergency measure that has been enforced only five times in the last 8 years. They also forget to tell us that when such severe restrictions on commuting are put in place, they also close schools, factories, construction sites, and so on. As a result, people who want to go to offices and open their businesses don't find public transport too crowded. And they also forgot to tell us that the public transport system in Beijing is much better than than what Delhi has to offer. And Beijing has much better medical emergency plan (the ambulance will reach you in much smaller time frame than in Delhi).

So go for odd-even. But if the situation is really an emergency situation, please close schools, colleges, factories and construction sites as well. Give every one an incentive to go out of Delhi, the traffic will come down and the pollution will come down.

The activists also don't tell us that a similar program attempted in Mexico City about 10 years ago resulted in no improvement in pollution levels at times when the restrictions were in place, and a significant increase in pollution during the time when the restrictions were not in place. Emergency situations certainly don't need emergency responses which may make situation worse.

We are so concerned about the taxi drivers and want them to continue their jobs every day. But how about a large number of poor people employed as drivers of personal vehicles. I can see two neighbors coming together and telling a driver that he should work for them on alternate dates, and firing the other driver.

Should nothing be done and let everyone catch pollution related diseases. Of course, not. I too agree that it is an emergency situation and we must act. If we really look at the restrictions being considered, the goal is two-fold: The number of kilometers driver by vehicles in a day is likely to reduce and that should cause reduction in pollution. We don't have data but I suspect that this number will not be significant. The bigger savings will come from the fact that even a 10% reduction in vehicles will cause the traffic to be much more smooth. Cars waiting in the traffic are very big polluters. And essentially we need to find ways that we can reduce car driving and we need to find ways that the traffic can be made smoother.

So here are the suggestions:

1. Can we ensure that DTC buses stop in the left most lane only at the stops. Buses stop in the second and sometimes even third lane and this causes huge traffic jams and thus pollution.
2. Can we ensure that autos park near Metro stations in one single file. Stopping and parking of autos haphazardly near places like Metro Stations is another big cause of traffic jams and pollution.
3. Can we have a system than any vehicle parked wrongly will be towed away, heavily fined. Will make the traffic smooth without having to restrict driving.
4. No marriage processions on busy roads. (Preferably, no religious processions either, at least on the emergency days.)
5. Control encroachments on the roads, including by polluting businesses on main roads.
6. Control the number of hawkers in busy areas.

If we can't enforce these, do I really believe that we can enforce odd-even rule?
This itself would reduce vehicular pollution very significantly, without having to restrict driving. And those of you who are old enough to remember Asian Games, 1982 would know that if Delhi Police wants to do all of the above, they can actually do it.

Any way, we also need to reduce the number of kilometers driven by people. So more suggestions:


1. Can we make it somewhat more expensive to drive to shift more people towards public transport. Increase the road tax, registration, driving license charges, pollution tax on diesel and petrol, increase the parking charges and so on. And the extra resources thus generated can be given to Delhi Metro and DTC to buy more coaches and buses. In particular, in my limited stay in Delhi, I find parking charges to be ridiculously low in most places. I understand that the charges are low, since I have an option to park anywhere without the fear of my car being towed away.

2. Can we declare that vehicles who do not follow even Bharat Stage II norms have to be junked. So don't just make plans for introducing Bharat Stage V, VI, etc., but also plan to ensure that vehicles who do not follow even older norms for pollution control are removed from the roads (instead of the blanket age-wise restrictions that have been talked about in the media - remove all 10-year old diesel vehicles, or 15-year old petrol vehicles).

3. Can we declare a few busy roads out of bound for single occupancy vehicle, not the whole of Delhi. If we insist on a minimum of two occupants in some areas, others who are driving alone too can drive to their destinations, but only will have to avoid some roads. So a small time penalty. Of course, rich may circumvent it by hiring drivers - but then increasing employment is always good.

4. Work with Ola and Uder type of operators and not ban them. They have the potential to make it smooth for the commuters. They can be encouraged to push car sharing and car pooling apps, as well as the bus trips. Make such technology based companies your partners in fighting pollution rather than adversaries. I will be happy to leave my car behind on all days if I can get reasonably priced taxi service within a few minutes of my need. So at least the parking on the roads will reduce and traffic will become smooth.

I am only focusing on traffic related things that can be done, since it is in the context of Odd-Even rule. Surely there are other contributors to pollution, and they need to be handled as well.


Of course, I realize that I too am guilty of making suggestions without seeing any data, the same thing that the activists are doing. To ensure that we don't get into an emergency situation again with very little data, we must invest in more monitoring stations, more data collection, which is available to anyone easily, for research.

And, finally this in the lighter vein. We just had 20,000 weddings on 7th, making sure that there are 50-60 lakh people on the road. Can we encourage electronic weddings. The gifts can be ordered on flipkart and delivered on the day of the wedding. The hosts can order food on foodpanda and get them to deliver the food at every guest's home. The couple on the red chairs can have 30 seconds of togetherness with each guest on skype and a photo can be created using photoshop. Just imagine 50 lakh less people on the road, less pollution.

And a business idea for a start-up. Can we have a marketplace for car sharing. I would be happy to lend my car on two of the 15 days that it is allowed to be on the road, and in exchange I want a car on two of the other 15 days that I am not allowed to drive my own car.