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News Entry# 289322
Dec 21 2016 (19:49)  Arun Jaitley says railway services must be paid for, populism can’t be measure of success (www.google.co.in)
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News Entry# 289322   Blog Entry# 2099111     
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Posted by: Yuva Rahul^~  108 news posts
Weeks before he presents India’s first combined general and railway budget, Finance Minister Arun Jaitley today said rail commuters must pay for the service they receive even as he made a strong case for outsourcing of non-core functions like hospitality services. He said year after year, the success of Railway Budget was measured by subsidising consumers and making populist announcements regarding trains.
“Railways got caught in a battle where populism prevailed over performance and the basic principle on which any commercial establishment is to be run, the first essential principle is that consumers must pay for the services that they receive,” he said. Speaking at a conference on Accounting Reforms in Railways organised by CII, Jaitley said unless the railways strengthen its
performance and internal management system, they will lose out to competition from other sectors like highways and airlines in passenger and cargo transportation.
“The core competence of railways is really to drive trains, to provide those services. Hospitality may not be the core competence of the railways and therefore, what is not within its core competence, the principle of outsourcing — which is accepted world over — can be a logical addition to those activities of railways,” Jaitley said. Citing example of power and highway sectors which started doing well only after consumers paid for services they got, Jaitley said worldover, only those services have succeeded where there is a financial model which says that consumers pay for what they receive.
” (But)We turned this whole theory upside down by a self imposed indiscipline that populism requires that I require that consumers not to pay for service that they receive. Therefore any establishment will start crumbling in its own weight and contradictions,” he said. The government had in September scrapped the 92-year old practice of presenting a separate railway budget and decided to present a combined general and railway budget for 2017-18 on February 1, 2017.
Speaking at a conference on Accounting Reforms in Railways organised by CII, Jaitley said that the shift towards accrual system of accounting from cash system will better reflect its performance. “Your accounting systems really must reveal more instead of concealing the reality. What is the kind of investment in infrastructure that is coming in, what is the kind of investment in railway safety, what is the kind of outcome of outlay that you have planned, I think those accounts must really reflect the reality,” he said.

1 posts - Wed Dec 21, 2016 - are hidden. Click to open.

Dec 22 2016 (09:12)
For Better Managed Indian Railways~   1933 blog posts
Re# 2099111-2            Tags   Past Edits
It is impractical to wipe out subsidy in a single stroke by doubling/ trebling the fares.
It is to be done in steps so that people are in a position to bear it and gradually become habitual of paying somewhat realistic fares.
% recovery of costing for Mumbai suburban should be better , Since it was giving good operational surpluses earlier, the recovery should be much better.
does not release the data about the recovery in details like recovery in ACIII/ACII,SL classes, Mum/Kolkata/Chennai suburban etc.. It say 57% recovery as a whole.

Dec 22 2016 (13:38)
Pained to know Boeing 777 landcrashed~   23273 blog posts   21097 correct pred (68% accurate)
Re# 2099111-3            Tags   Past Edits
Recently while buying a UTS tkt in Kolkata Suburban I saw the msg printed that IR recovers only 36% of cost of travel on avg in Suburban sector. I assume that grossly tells the picture of Kolkata, Mumbai & Chennai Suburban. So increasing the slabs of MST has become an urgent necessity.

Dec 22 2016 (15:29)
For Better Managed Indian Railways~   1933 blog posts
Re# 2099111-4            Tags   Past Edits
It would be interesting to know the recovery by IR for individual suburban sectors. It may reveal many interesting facts.
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