TERMS OF TRADE | Lessons from the Balasore train tragedy
For better safety systems, investment is required, but Indian Railways cannot afford to raise ticket costs as a bulk of its passengers are unable to afford it.
This week’s news cycle will continue to be haunted by the terrible train accident in Odisha. One hopes that the government will investigate it properly, fix accountability, and more importantly, take steps to prevent such mishaps in the future. What this week’s column wants to do is to talk about the large political economy crisis of which this tragedy is a very macabre manifestation.
Let me begin this column on a very politically incorrect note. According to the National Crime Records Bureau (NCRB), 1,73,860 died in various traffic accidents in India in 2021; 16,431 people died in rail accidents (excluding at level crossings) in 2021. This number was 24545 and 24619 in 2018 and 2019, when the total number of deaths in traffic accidents was 1,78,832 and 1,81,113 respectively. Even one death is one too many, but the sad fact is that the annual rail accident death toll for 2023 could very well end up being anything but out of the ordinary.
Why does the latest accident touch such a raw nerve then? At the risk of succumbing to the much-abused tendency of putting hearsay in journalistic work, let me answer this question by reiterating what a friend from school said on a WhatsApp group while talking about the accident. Coromandel Express, one of the trains involved in the accident, has transported a lot of Biharis to prosperity, he commented, when another friend was recounting his journeys in the same train, which he would take to travel to his engineering college in southern India, from Bihar via Kolkata. Neither of my friends now take a train to travel back to Bihar or other places.
This is more than just an anecdote. If there is one thing which captures the upward mobility of lower middle-class Indians of my generation in post-reform (actually post Y2K is a better time-frame) India, it is the shift from travelling in trains (mostly sleeper class) to flying in aeroplanes.
Numbers speak for themselves. The number of railway passengers increased almost two times between 1995-96 (the earliest year for which we have data on domestic air travellers in the CMIE database) and 2019-20, the year just before the pandemic hit. The number of domestic air travellers increased more than 10 times during this period. Even the headline growth in railways passengers hides a class-wise variation. The number of AC three tier sleeper coach passengers increased 75 times during this period, while the number of ordinary second class and Sleeper class passengers (in non-suburban trains) increased just 1.6 times and 5.3 times during this period. Supply has followed demand. A 2019 Right to Information based story in The New Indian Express said that 70% of the berths added in the railways in the last five years were in the relatively more expensive air-conditioned category.
To be sure, absolute numbers tell us a different story. The number of second class (1.8 billion) and sleeper class (1.1 billion) passengers in 2019-20 is much more than the number of AC three tier (113 million) or domestic air travellers (270 million).
What is the larger economic point of these numbers? If there is one thing which has sustained India’s economic transformation in the post-reform period, it is large-scale rural to urban migration. Without this, millions of workers would be stuck on unviable farms. Almost all of it has happened via what is an extremely low-cost transport network of the railways.
To be sure, low-cost rail transport is not exactly low cost, as railways have been accumulating losses on most of its passenger operations. Data given in a 2022 CAG Report shows that railways incurred an operational loss on every category of passenger travel. This was to the tune of ₹20,135 crore in sleeper class, ₹17,641 crore for second class and ₹6,500 crore for AC three tier (all numbers are annual, for 2020-21). That freight operation earnings cross-subsidize Indian Railways’ passenger operations is well known. Pricing of new age trains such as Vande Bharat clearly shows that better trains will also entail much higher fares in the future. But there is a problem in achieving this transition.
Much of the infrastructure for passenger operations is used by both high-cost and low-cost trains. The drive to expand modern trains without cutting back on the low-cost supply has pushed safety measures to the brink as several commentators have noted in the aftermath of the recent tragedy. If efficiency were the only metric for Indian Railways, the person in charge would shut down loss making low-fare operations and free-up the infrastructure to expand profit making (high-fare) passenger operations. This otherwise prudent business decision, however, will make ticket prices unaffordable for a large number of India’s poor train travellers. Not only could this derail the migration economy, it also has the potential to cause a huge political backlash. Any strategy which tries to do justice to both safety and affordability will require a significant amount of additional fiscal resources being invested in the railway. Railways is not the only contender for such resources.
To surmise, the contradiction facing Indian Railways is not very different from the one facing other low-level-equilibrium-trap sectors such as agriculture in India. In agriculture, the only way to ensure higher incomes is to live with a high food price, and therefore, a high inflation economy. Ensuring adequate safety for the massive underclass whose passenger traffic demands are overwhelming the Indian Railway’s infrastructure requires making an economic commitment which will completely overwhelm the existing fiscal framework.
The middle class, which plays a disproportionate role in India’s public discourse, sincerely sympathises with the problem facing those who must toil in a viability crisis ridden farming or travel in unsafe trains. More than anything, this is because this cohort still has lived memories of these environments. But it is unwilling to live in a world which has to bear the economic consequences of solving these problems. This fundamental contradiction, if left unresolved, will make us continue to move in a never-ending cycle of anguish and apathy vis-à-vis the gross deficiency in our efforts to prevent such catastrophes.
Every Friday, HT’s data and political economy editor, Roshan Kishore, combines his commitment to data and passion for qualitative analysis in a column for HT Premium, Terms of Trade. With a focus on one big number and one big issue, he will go behind the headlines to ask a question and address political economy issues and social puzzles facing contemporary India.
The views expressed are personal
This week’s news cycle will continue to be haunted by the terrible train accident in Odisha. One hopes that the government will investigate it properly, fix accountability, and more importantly, take steps to prevent such mishaps in the future. What this week’s column wants to do is to talk about the large political economy crisis of which this tragedy is a very macabre manifestation.
Let me begin this column on a very politically incorrect note. According to the National Crime Records Bureau (NCRB), 1,73,860 died in various traffic accidents in India in 2021; 16,431 people died in rail accidents (excluding at level crossings) in 2021. This number was 24545 and 24619 in 2018 and 2019, when the total number of deaths in traffic accidents was 1,78,832 and 1,81,113 respectively. Even one death is one too many, but the sad fact is that the annual rail accident death toll for 2023 could very well end up being anything but out of the ordinary.
Why does the latest accident touch such a raw nerve then? At the risk of succumbing to the much-abused tendency of putting hearsay in journalistic work, let me answer this question by reiterating what a friend from school said on a WhatsApp group while talking about the accident. Coromandel Express, one of the trains involved in the accident, has transported a lot of Biharis to prosperity, he commented, when another friend was recounting his journeys in the same train, which he would take to travel to his engineering college in southern India, from Bihar via Kolkata. Neither of my friends now take a train to travel back to Bihar or other places.
This is more than just an anecdote. If there is one thing which captures the upward mobility of lower middle-class Indians of my generation in post-reform (actually post Y2K is a better time-frame) India, it is the shift from travelling in trains (mostly sleeper class) to flying in aeroplanes.
Numbers speak for themselves. The number of railway passengers increased almost two times between 1995-96 (the earliest year for which we have data on domestic air travellers in the CMIE database) and 2019-20, the year just before the pandemic hit. The number of domestic air travellers increased more than 10 times during this period. Even the headline growth in railways passengers hides a class-wise variation. The number of AC three tier sleeper coach passengers increased 75 times during this period, while the number of ordinary second class and Sleeper class passengers (in non-suburban trains) increased just 1.6 times and 5.3 times during this period. Supply has followed demand. A 2019 Right to Information based story in The New Indian Express said that 70% of the berths added in the railways in the last five years were in the relatively more expensive air-conditioned category.
To be sure, absolute numbers tell us a different story. The number of second class (1.8 billion) and sleeper class (1.1 billion) passengers in 2019-20 is much more than the number of AC three tier (113 million) or domestic air travellers (270 million).
What is the larger economic point of these numbers? If there is one thing which has sustained India’s economic transformation in the post-reform period, it is large-scale rural to urban migration. Without this, millions of workers would be stuck on unviable farms. Almost all of it has happened via what is an extremely low-cost transport network of the railways.
To be sure, low-cost rail transport is not exactly low cost, as railways have been accumulating losses on most of its passenger operations. Data given in a 2022 CAG Report shows that railways incurred an operational loss on every category of passenger travel. This was to the tune of ₹20,135 crore in sleeper class, ₹17,641 crore for second class and ₹6,500 crore for AC three tier (all numbers are annual, for 2020-21). That freight operation earnings cross-subsidize Indian Railways’ passenger operations is well known. Pricing of new age trains such as Vande Bharat clearly shows that better trains will also entail much higher fares in the future. But there is a problem in achieving this transition.
Much of the infrastructure for passenger operations is used by both high-cost and low-cost trains. The drive to expand modern trains without cutting back on the low-cost supply has pushed safety measures to the brink as several commentators have noted in the aftermath of the recent tragedy. If efficiency were the only metric for Indian Railways, the person in charge would shut down loss making low-fare operations and free-up the infrastructure to expand profit making (high-fare) passenger operations. This otherwise prudent business decision, however, will make ticket prices unaffordable for a large number of India’s poor train travellers. Not only could this derail the migration economy, it also has the potential to cause a huge political backlash. Any strategy which tries to do justice to both safety and affordability will require a significant amount of additional fiscal resources being invested in the railway. Railways is not the only contender for such resources.
To surmise, the contradiction facing Indian Railways is not very different from the one facing other low-level-equilibrium-trap sectors such as agriculture in India. In agriculture, the only way to ensure higher incomes is to live with a high food price, and therefore, a high inflation economy. Ensuring adequate safety for the massive underclass whose passenger traffic demands are overwhelming the Indian Railway’s infrastructure requires making an economic commitment which will completely overwhelm the existing fiscal framework.
The middle class, which plays a disproportionate role in India’s public discourse, sincerely sympathises with the problem facing those who must toil in a viability crisis ridden farming or travel in unsafe trains. More than anything, this is because this cohort still has lived memories of these environments. But it is unwilling to live in a world which has to bear the economic consequences of solving these problems. This fundamental contradiction, if left unresolved, will make us continue to move in a never-ending cycle of anguish and apathy vis-à-vis the gross deficiency in our efforts to prevent such catastrophes.
Every Friday, HT’s data and political economy editor, Roshan Kishore, combines his commitment to data and passion for qualitative analysis in a column for HT Premium, Terms of Trade. With a focus on one big number and one big issue, he will go behind the headlines to ask a question and address political economy issues and social puzzles facing contemporary India.
The views expressed are personal
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