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Indian Railways posts record 6.3-billion-dollar surplus
NEW DELHI (AFP) Giant state-run Indian Railways, once on track for bankruptcy, posted a record 6.3-billion-dollar surplus on Tuesday, announced new lines and cut fares in a populist budget with elections looming.
"The world today acknowledges I've done a tremendous job," said the wisecracking Railways Minister Lalu Prasad Yadav, presenting his fifth railway budget since the Congress-led coalition government took office in 2004.
The railway budget for the fiscal year to March 2009 is seen as a harbinger of the national budget, which comes on Friday and is the last expected to be presented before the next general elections due within 12 to 15 months.
The charismatic minister, known for his self-congratulatory style, said the railway would post a record cash surplus of 250 billion rupees or 6.3 billion dollars this year, up from a 4.4 billion dollar surplus the previous year.
The surplus, helped by higher freight traffic in a booming economy, came after experts warned in 2001 the Victorian-era railway was mired in a "terminal debt trap" and faced bankruptcy.
Yadav presented what the media dubbed a "please-all" budget with steps to boost freight operations, cut freight and passenger fares and improve services such as reservations and toilets -- both often an ordeal on Indian trains.
The budget contained planned record spending of 370 billion rupees (9.27 billion dollars), up 21 percent from the previous year, on new dedicated high density freight routes, network expansion, safety and other improvements.
Priority "has been given to modernisation," Yadav said. Easing transport bottlenecks are regarded as vital to spurring economic growth.
The fare cuts were seen as aimed at curbing inflation, running at a six-month high of 4.35 percent, that has hit hardest India's poor masses credited with giving the government its 2004 upset win.
"This is a good and strong, anti-inflationary measure," said Rajeev Chandrasekhar, president of the Federation of Indian Chambers of Commerce and Industry.
When the minister took over the railway, one of the world's largest which carries 18.5 million people daily, it was burdened with huge losses.
But Yadav transformed its finances by expanding freight capacity and building new lines, leasing out ad spaces, introducing competitive bidding and other innovations. It now is one of the public sector's best cash generators.
"If you do not milk the cow fully, it falls sick," Yadav, son of an illiterate cowherd, once said to explain the railways' transformation.
He compared Tuesday the "historic" turnaround of the railway, still India's main form of long-distance travel despite fierce competition from new private airlines, to the latest Bollywood hit movie "Chak De India" or "Go India."
"Every child in the country will now say 'Chak De Railway,'" Yadav told parliament. "We're scoring goal after goal."
Indian Railways forecast gross traffic earnings would grow by over 12 percent next year despite the fare cuts.
Yadav, head of the Rashtriya Janata Dal, the second biggest party in the coalition, is now invited by business schools to pass on his management tricks.
"The sapling we planted will grow into a mighty tree and bear fruit," said Yadav.
The railway's upturn has given an image makeover to Yadav, whose 15-year-rule of poverty-hit, crime-ridden eastern Bihar state was dubbed by critics as "jungle raj."
NEW DELHI (AFP) Giant state-run Indian Railways, once on track for bankruptcy, posted a record 6.3-billion-dollar surplus on Tuesday, announced new lines and cut fares in a populist budget with elections looming.
"The world today acknowledges I've done a tremendous job," said the wisecracking Railways Minister Lalu Prasad Yadav, presenting his fifth railway budget since the Congress-led coalition government took office in 2004.
The railway budget for the fiscal year to March 2009 is seen as a harbinger of the national budget, which comes on Friday and is the last expected to be presented before the next general elections due within 12 to 15 months.
The charismatic minister, known for his self-congratulatory style, said the railway would post a record cash surplus of 250 billion rupees or 6.3 billion dollars this year, up from a 4.4 billion dollar surplus the previous year.
The surplus, helped by higher freight traffic in a booming economy, came after experts warned in 2001 the Victorian-era railway was mired in a "terminal debt trap" and faced bankruptcy.
Yadav presented what the media dubbed a "please-all" budget with steps to boost freight operations, cut freight and passenger fares and improve services such as reservations and toilets -- both often an ordeal on Indian trains.
The budget contained planned record spending of 370 billion rupees (9.27 billion dollars), up 21 percent from the previous year, on new dedicated high density freight routes, network expansion, safety and other improvements.
Priority "has been given to modernisation," Yadav said. Easing transport bottlenecks are regarded as vital to spurring economic growth.
The fare cuts were seen as aimed at curbing inflation, running at a six-month high of 4.35 percent, that has hit hardest India's poor masses credited with giving the government its 2004 upset win.
"This is a good and strong, anti-inflationary measure," said Rajeev Chandrasekhar, president of the Federation of Indian Chambers of Commerce and Industry.
When the minister took over the railway, one of the world's largest which carries 18.5 million people daily, it was burdened with huge losses.
But Yadav transformed its finances by expanding freight capacity and building new lines, leasing out ad spaces, introducing competitive bidding and other innovations. It now is one of the public sector's best cash generators.
"If you do not milk the cow fully, it falls sick," Yadav, son of an illiterate cowherd, once said to explain the railways' transformation.
He compared Tuesday the "historic" turnaround of the railway, still India's main form of long-distance travel despite fierce competition from new private airlines, to the latest Bollywood hit movie "Chak De India" or "Go India."
"Every child in the country will now say 'Chak De Railway,'" Yadav told parliament. "We're scoring goal after goal."
Indian Railways forecast gross traffic earnings would grow by over 12 percent next year despite the fare cuts.
Yadav, head of the Rashtriya Janata Dal, the second biggest party in the coalition, is now invited by business schools to pass on his management tricks.
"The sapling we planted will grow into a mighty tree and bear fruit," said Yadav.
The railway's upturn has given an image makeover to Yadav, whose 15-year-rule of poverty-hit, crime-ridden eastern Bihar state was dubbed by critics as "jungle raj."