An Open Letter to MMS

Dear MMS,

First of all, I am not a celebrity nor a supporter of your party nor a politician by any length of imagination. So, this open letter may remain just that a open post with no one reading. Still I felt the need to write this since for small persons like me, the Internet is the only way to express our views and feel satisfied that I / we have done our duty in trying to put across our views on how the country should march ahead (not that you have a deficit in the number of Advisors, I think you would have one too many).

Till 2004, you were known as the man who opened up India‘s Economy, the man who could be looked forward to a great and glorious India. A man who was kept on the same pedestal as Nehru & Gandhi. If Nehru and Gandhi brought us Independence in one way, you brought for a large majority of us, Independence in another way – Financial Independence so as to speak.

While getting jobs were a major issue in Pre MMS era, Attrition came to be known as the key word post 2000. But post 2004, when the we had the dream team (think of it as the replica of The All-Time ODI Dream Team in Cricket) with you being the Prime Minister and Chidambaram being the Finance Minister, our hopes have kept on sinking. While first it was said that the Left which was the major cause of you having to neglect your core philosophies, post the Nuclear deal, even you have lost that excuse. Its now as if that you and the team are no more the same that was in 1992.

It is in this environment that you came up with FDI and I for one felt happy that maybe finally the real MMS is beginning to take charge. While its another matter that you were made to with-draw, the fact that you did take the call gladdens my heart with hope that maybe not everything has gone to dogs. Maybe there is still some hope left despite the fact that we have now lost close to 7 years which will take a toll in the future. A study I read said that any major reforms took 5 years for its full benefits to be visible. So the good deeds done during 1999-2004 have had a major play in my opinion (alongwith the global boom in everything). But now we are back to a stage where we either have to take crucial decisions or let others (China, Brazil, even smaller countries) walk away with the glory of the win while we continue to whine about on our state of affairs.

One of the biggest problems facing India is lack of Infrastructure. Every city is said to be in ruin (be in Mumbai or Bangalore, we have our fair share of problems that will take years if not decades to resolve), connectivity is missing for a large part of India. Connectivity is carried out in 2 major ways – Road and Rail. While there has been some amount of progress in Road

Transportation, we for some reason have left the Railways to rot (though compared to Pakistan, we seem to have kept it in much better shape – the one we were handed over by the British).

When we got Independence, the Railways occupied the dominant position of transport in India. But since then it has been on a steady decline. While we have minister after minister announcing launching of new trains (most of them to their home states), we are also seeing a gradual erosion in the infrastructure which is being blamed for the number of accidents that happen regularly.

The Railways have been loosing market share for a long time now. While it commanded 78.50% of Freight Traffic and 60% of Passenger Traffic in 1950-51, this has now come down to 25.75% and 17.68% (Please see the pic taken from a report here http://twitpic.com/7r5iss ). This despite the fact that Rail Transport is one of the cheapest and most efficient way to transport goods and people. But without adequate infrastructure, people are forced to check out other means even if that means paying extra. After all, time is money for everyone and one cannot compensate on time in order to save a few bucks.

One reason I fathom for this kind of fall has been the fact that while on one hand the Railways by themselves having determined that they are social institutions and hence cannot charge higher fares are unable to raise fresh resources and on other hand, the government which is always short of cash is unable to fund it for developing better infrastructure. While we seem to have 10 Billion Dollars to save one single Airline, we don’t have similar amounts to ensure that more infrastructure is developed by Railways which in turn will give a strong boost to the Economy and the hinterland in India as well.

One of the best ways to generate money is to dipose of the state owned Public Sector Enterprises. Most of them are on the way downhill with one after another going into loss. But if the same can be rid off and when I say sell, its not Sell to the Public via IPO at inflated prices – aka NMDC / NHPC among others but Sell in the way the NDA government did – total disinvestment. The amount so generated can be put to better use generating more employment via Infrastructural projects than supporting a couple of thousand staff (all of whom will not get retrenched either, the sale can have conditions for the same).

In my opinion, it would take the disinvestment of just 1 or 2 PSU’s to generate a sum of around 1 Lakh Crore per year. If this entire amount was given to Railways for putting into development of infrastructure, I can assure you that within the time that this government will end, the amount of infrastructure development by the Railways will match or even put into shame the amount of infrastructure development done during the last few decades.

All it needs is someone high enough to take the call and that person can be you. With Didi being in charge of Railways, I am sure she won’t object to the sale if it was promised that the entire amount will come to the Railways for use in developing new infrastruture.

So, can you take such a call?

Regards

An Aam Admi

PS: A real good report on Modal Split between Rail and Road Modes of Transport in India – Prosenjit Dey Chaudhury can be read here http://www.vikalpa.com/pdf/articles/2005/2005_jan_mar_17_33.pdf