Railways Minister Lalu Prasad Yadav presented a populist budget that cut prices across the board with the claim that increased traffic will bring in more revenue but critics have castigated him on adopting policies that will ruin Railways. Prices were cut across the board both for passengers and freight but no allocation has been made for upgrading tracks, getting new coaches and trains, rebuild facilities, upkeep infrastructure, and accommodate ever-fattening paychecks.
The Railways is already running to capacity in seats and it is unclear how reducing prices will increase revenue. Losing margins against rising fuel costs and record high inflation, it is unclear how the submitted budget will help the Railways survive and thrive in the future. However, as with many other policies, businesses have endorsed the budget looking mostly at their bottom lines without regard to the health of the Railways. For instance, the Railways is already losing its profitable freight business to truckers and freight targets have been raised marginally at eight per cent to 785 metric tons for 2007-08 and the Rail Bhavan has already acknowledged that the Railways is running to capacity and cannot be stretched any more.
Given these facts, the Railways budget 2007 is not something to cheer.