Indian Railways: Let the common man have a stake - By Bhagyashree Pande26 Jun 2014 Railways require a drastic upgrade and everyone wants to be a part of this efficient system – one that has the farthest and the most cost-effective reach. Why not put the common man, along with the businessman, a part of this system instead of just giving him the current option of paying for using it. Drastic changes that pinch the common man’s pocket are always unwelcome no matter how practical or need-based they may be. A steep hike of 14 per cent or more may very well be the need of the hour but given the current inflationary situation and the forecast of a failing monsoon (which will further fuel inflation), a steep hike in rail fares is the last thing Indians need. Most affected are ones who use suburban railways in cities like Mumbai, Kolkata, Delhi. These are daily commuters and unlike holiday-goers, have no other choice but to use trains daily. Their household budgets do get affected with this hike and their employers do not give a commensurate pay hike or add to their daily travel allowances. Small companies do not have the flexibility to absorb such pay hikes as their profit margins are thin and the vagaries of inflation affect them most. But what is the alternative for such a hike? One solution could be to privatise a part of the railways. Another can be to ask investors to plough funds into this well-oiled system which is only going to increase the efficiency of India and Indians. If plans are to make railway the lifeline of every Indian by trying to make it a daily commuting service, then investment in the system is the best way forward. Surely, Indian business have a huge future with the railways plying not just goods but also being a way for staff to commute. Why not float railways as an equity in the stock markets? Another way of raising funds could be to float railway bonds. Like the municipal bonds that are being raised abroad to invest in local municipal services railways could also float bonds for investments. It could be purely rail bonds or bonds for a section of railways like upgrading of tracks could find investment interest from metallurgy, steel, ore companies. Bonds for the signalling system and electrical supplies could find interest from IT, electronic companies, and electricity utilities. Bonds of wagons and coaches could find investments from those that supply material for the same or those who use these services (industrial houses like car, cement, steel, metal manufacturers). Even the common man who uses this well connected system for himself and his family can choose to have a stake. Why not make everyone partner in the progress of the railways by chipping a small part of their earnings and be made more accountable for the same? This way there will also be transparency in every aspect of the railways and the common man and the investor will know the efficiency and efficacy of the system. Yes there would be red flags to the dilution of Government equity by the trade unions in the railways. But then it is to the benefit of railway workers if investors come up with more money resulting in upgrading and modernisation. One thing railway unions fear the most is modernisation simple case to the point was the introduction of computers for dispensing tickets leading to job losses. It was an unfounded fear that was fanned by vested interests. The move ultimately resulted in betterment of railway employees. In fact, modernisation of tracking and signalling system would mean better learning and improvement of the skill-sets which could mean a higher pay and in some cases even new job prospect (maybe to work with an upcoming metro system) as well as increased efficiency. Hefty salaries and pensions are also an issue that the railways are confronted with. Why not have the pension corpus invested in these bonds? This will give the pensioners a feeling of still being part of the establishment. There is no doubt that India will grow and railways will play a major role in that growth so there is no way a pension investment could go bust or get negative returns. So huge is the railway corpus of pension that it could compete with the likes of Life Insurance Corporation which is a major investor in the equity and bond market. Not many may want to take a risk in their old age with their pensions but then a good return from a futuristic project like the railways which is the lifeline of the country is surely bound to beat the inflation. Asking every Indian to participate directly or indirectly by investing in the railways will be a way forward in promoting a sense of belonging besides raising the much needed funds. for more niticentral/2014/06/26/indian-railways-let-the-common-man-have-a-stake-232303.html
Posted on: Fri, 27 Jun 2014 01:13:39 +0000
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