Arun Jaitley: Railway services must be paid for

New Delhi: Emphasising that the passengers must pay for the services they receive, Finance Minister Arun Jaitley on Tuesday claimed that the Indian Railways has seen populism overpowering performance.

Speaking at a conference organised by CII on Accounting Reforms in Railways, Jaitley pointed out that if the railways does not work on bettering its performance and internal management system, it will lose out competition with other sectors like highways and airlines in passenger and cargo transportation.

He said that over the past few years, the railway budget was measured by subsidising consumers and making populist announcements regarding trains which have hit the government organisation badly.

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"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.

Giving example of power and highway sectors, Jaitley said that across the world, only those services have thrived where there is a financial model which compels the consumers to pay for what they are receiving.

"(But) We turned this whole theory upside down by a self imposed indiscipline that populism requires consumers not to pay for service that they receive. Therefore any establishment will start crumbling in its own weight and contradictions," Arun Jaitley said.

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Earlier in September 2016, the government had scrapped the 92-year-old tradition of preparing and presenting a separate rail budget and announced that for 2017-18, a combined general and railway budget will be presented on February 1, 2017.

Claiming that shift towards accrual system of accounting from cash system will be better visible in the performance, Jaitley remarked, "Your accounting systems really must reveal more instead of concealing the reality. Which kind of investment in infrastructure is coming in, which kind of investment in railway safety is coming in and which kind of outcome of outlay that you have planned is coming in, such accounts must really reflect the reality," he said.