1st Five Year Plan
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Introduction || APPENDIX (CH-4) || APPENDIX (CH-9) || ANNEXURE (CH-12) || APPENDIX (CH-14) || APPENDIX (CH-24) || APPENDIX (CH-29) || Conclusion
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Chapter 31:


The pattern of the transport system in the country will undergo substantial changes 'as the various agricultural and industrial programmes included in the Five Year Plan are progressively implemented. For instance, the increasing output of foodgrains within the country and the manufacture of fertilisers at Sindri will imply diminishing movement of these commodities from the ports and at the same time a growing demand for the internal transport requirement. On the other hand, the new cement factory- at Rajgangpur which commenced production early in 1952 and the expansion of the Andhra Cement Company at Vijayawada will reduce the demand on the transportation system by expanding production in the vicinity of the consuming centres. Generally, however, the cumulative effect of the Plan will be to increase the overall demand for transportation facilities. To cope with the problem, the probable points of increasing demand for transportation facilities should be known in order either to provide the necessary facilities or to relieve the strain on the system by diverting traffic elsewhere.

2. Broadly speaking, the plans for railway and maritime transport, envisaged in this Chapter, have as the primary objective the rehabilitation of assets which has been postponed for a long time due to various factors. Auxiliary facilities for aerial and maritime transport have also been taken into account. The potentialities of rivers for the development of inland water transport are yet not fully appreciated but the establishment of the Ganga Water Transport Board for developing navigation on the river Ganga shows a realisation of a new transport facility.

1. Railways

3. The Indian railway system is the largest nationalised undertaking in the country. It is one of the few railway systems in the world with a net earning power adequate to meet all fixed charges and provide substantial sums for development and reserves. The principal reason for this is to be found in the high levels of both passengers and goods traffic in recent years and the rationalisation of the structure of rates and fares carried out in 1948.

4. The most serious problem facing the railways today is the task of rehabilitation and provision of adequate equipment. During the last twenty years, railways' assets have been put to intensive and extensive use with little opportunity for rehabilitation. In the thirties the Indian railways were caught in the world-wide economic depression and their earnings were insufficient even to meet the interest liabilities to general revenues. Maintenance was slowed down or deferred from year to year, while renewals and replacements had, to be limited to the minimum permitted by the requirements of mere safety in operation. The railways were just emerging from the depression in 1937, and were attempting to overtake the arrears of maintenance and replacements, when the second world war intervened in 1939 and interrupted this process.

5. In the first phase of the war, the Indian railways, despite the shortage, had to release wagons, locomotives and track materials for the Middle East. Over 8 per cent of the metre gauge locomotives, 15 per cent of metre gauge wagons, 4,000 miles of track, and 4 million sleepers were released for use overseas and in India on military projects. For this purpose, the railways were obliged to dismantle as many as 26 branch lines. In the second phase of the war, India became the base for the offensive against Japan and a large number of railway workshops had to be diverted to the manufacture of munitions and other items required for war. In these circumstances, abnormal arrears of renewals and replacements accumulated, and internal facilities for rehabilitation were appreciably curtailed or incapacitated by the mobilisation and intensive utilisation of workshop equipment in connection with the requirements of the war.

6. As soon as the hostilities ended, new problems came up in the wake of Partition. The division of the North Western Railway deprived the Indian portion of the majority of workshops and maintenance and repair facilities. Similarly the division of the Bengal Assam Railway left the Assam Railway without any workshop or a link with rest of the railway system. The loss of the port of Karachi led to the diversion of traffic to Bombay causing a great deal of congestion and creating a transport bottleneck in the Bombay Port. This necessitated the development of a major port at Kandia and the construction of the Kandla-Deesa rail link.

7. Thus, the problem of rehabilitation and replacement created by the post-1930 economic depression, neglected by the conditions of the war years, and accentuated by the special features of Partition has become the major concern of The railways.

Magnitude of the Rehabilitation Programme

8. The magnitude of the problem of rehabilitation may be judged from the abnormal proportion of the overaged stock. From detailed figures summarised below it will be observed that the arrears of renewals already accumulated by March 31, 1951, amounted to 1,050 locomotives, 5,514 coaching vehicles, and 21,418 wagons, against the normal figures of average annual renewals of 190 locomotives, 650 coaching vehicles and 5,000 wagons. For an overall picture of the position during 1951—56,-t is necessary to add to these figures the numbers which will become overaged during this period. The total stock which will have reached the normal age for replacement by March 31, 1956, is, therefore, 2,092 locomotives, 8,535 coaches and 47,533 wagons.

Rolline Stock Requirements for Renewals 1951-56

Locomotives Coaching vehicles Goods wagons
Number on line on Class I railways on March 31, 1952 . 8,209 19,193 199,094
Estimated average annual renewals 190 650 5,000
Number requiring replacement on March 31,1952, being over 40 years of economic life in the case of locomotives and wagons and 30 years in the case of coaching vehicles 1,050 5.514 21,418
Stock overaged and replaced but retained in service on March 31, 1951 1,604 1,381 25,838
Number expected to become overage between March 31, 1951 and March 31, 1956 1,042 3,021 26.115

9. What has been stated in the previous paragraphs refers only to the mobile equipment. The state of che immobile equipment has been a subject of no less concern. The condition of the track has also deteriorated during the last two decades, during which renewals were carried out only to the minimum extent required for safety in operation, leaving considerable rehabilitation of the track for completion in future. Speed restrictions have had to be continued on hundreds of miles of main lines as track renewals could not be carried out. The primary task of the railways is, thus, to overtake this heavy accumulation of arrears at as early a date as possible.

Demands on the Railway System

10. The importance and urgency of rehabilitation has to be considered from yet another point of view. The capacity of railways to handle traffic, adversely affected by the factors just referred to, was strained even further by the unprecedented increase in the volume of traffic. The remarkable increase in the demand for rail transportation in recent years is borne out especially by the statistics of passenger traffic. The passenger miles on Class I railways increased from 17,780 millions in 1938-39 to 39, 720 millions in 1950-51. During the same period, the freight carried increased from 21,786 million ton miles to 26,581 million ton miles. It has been possible to move increased traffic of these dimensions only by resorting to measures which would not be approved under normal conditions. Shortage of power and rolling stock has been sought to be met by retaining in service overaged and even replaced equipment which would normally have been scrapped. The replaced stock retained in service amounted on March 31, 1951 to 1,604 locomotives, 1,381 coaching vehicles, and 25,838 wagons. Until additions are obtained, this level of replaced stock in service will have to be maintained. Overcrowding in passenger trains has had to be allowed to continue to cope with the vastly increased traffic. As regards goods traffic, operation of goods specials, increased loading, sacrificing speeds, and other expedients have been resorted to in order to move the traffic. If the problem had been only a temporary phenomenon, these steps might have served the purpose and might have been discontinued when the needs disappeared. But it has have^now become necessary to provide as a permanent measures for a definite increase in the levels of traffic. The figure3 quoted above relating to goods traffic refer only to the tonnage actually moved by the railways and not what they could have moved if the capacity and power were available. Passenger traffic has possibly reached the peak for the time being, but an increase of 10 per cent over the present levels of freight traffic is anticipated by the end of the period of the Plan.

11. The rehabilitation programme of the railways has thus to take into account the two separate problems of deteriorated assets and the needs of the increased traffic.

Future Programme

12. Before proceeding to consider the future programme, it is necessary to refer briefly to what has been achieved during the four years following Partition. The locomotives and rolling stock placed on the line during 1946-47 to 1950-51 are shown in the following table. It will be seen that the effort during the post-Partition period has fallen short of the needs of the situation :

New Rolling Stock Placed on the Line (Units)
1946-47 1947-48 1948-49 1949-50 1950-51
Locomotives 518 28 104 412 293
Coaching vehicles 120 156 238 337 479
Goods wagons 14,580 5,424 2,522 1,443 3,106

13. Apart from the question of finance required for the procurement of rolling stock there is also the question of manufacturing capacity both in this country and abroad. Shortages in steel and other essential materials and priorities of national requirements render the supply position in other countries often extremely difficult. Domestic manufacturing capacity is limited and will have to be increased considerably if the shortages are to be made good by it within the next few years.

Manufacture and Import of Railway Equipment

14. With a view to eliminating dependence on external sources of supply, the Central Government have set up a workshop for the construction of locomotives at Chitranjan at an estimated cost of about Rs. 15 crores. The eventual production target for these works is 120 locomotives and 50 spare boilers per annum, but during the initial stages, i.e., period of the Plan, it is expected that 268 locomotives will be manufactured. The Government have also extended financial assistance to the Tata Locomotive Engineering Company by participating-in its capital structure to the extent of Rs. 2 crores. About 170 locomotives are expected to be supplied by this firm during the period of the Plan,

15. The position regarding coaching stock has already been explained. Improvement in affording substantial relief to overcrowding and eventually eliminating overcrowding is d ependent on obtaining sufficient coaches. úvery effort is being made to utilise fully the internal resources, but domestic capacity is limited. In 1948-49 the indigenous production of coaching vehicles was only 238; in 1949-50, 337; and in 1950-51, 479. The estimated output of indigenous production during the period of the Plan is 4,380.

16. To supplement indigenous production, the Central Government have taken in hand the establishment of a coach building factory at Perambur at a cost of Rs. 4 crores with an annual single-shift production capacity of 300 to 350 all-steel integral type coaches.

17. Domestic capacity for production of wagons is only slightly better in comparison. The 1948-49 indigenous production came to 2,520 wagons; in 1949-50, 1,095 wagons; and in 1950-51, 2,924 wagons. The estimate of'indigenous production during the period of the Plan is 30,000 wagons.

18. It will thus be seen that the output from indigenous sources for the manufacture of railway coaches and wagons falls substantially short of the present requirements for rehabilitating railways. In order to make good the deficiencies, imports will be necessary.

19. The import programme of the railways during the period of the Plan includes 600 locomotives, 1,294 coaching vehicles and 19,143 goods wagons within the funds likely to be available. The actual requirement of new locomotives from abroad, in view of the low capacity of internal production, is considerably more than the figure shown here. The programme also includes requirements of spare boilers, cranes and marine stock at an estimated cost of Rs. i -7 crores per annum.

Rehabilitation of Track

20. The deteriorated condition of the track has already been referred to. The magnitude of the problem will be evident from the fact that at present speeds have been restricted over about 3,000 miles of track on account of its weak condition. It is proposed to deal with 400 to 500 miles of track every year, and it is hoped that the restrictions on the main trunk routes will be removed within the period of the Plan.

21. As far as track renewals are concerned, the maximum use is at present made of the indigenous capacity for the production of track materials, and it is not proposed to import any rails or sleepers from abroad. During 1949-50, Class I railways purchased 2 -3 million wooden sleepers at a cost of Rs. 3 -90 crores. In addition, over 800,000 cast iron and over 600,000 steel s'eepers were also purchased. It is anticipated that the purchase during the period of the Plan will be of the same order. In view of short supplies and rising prices, it is necessary to effect economies in the use of timber. The possibility of using half round sleepers for some metre and narrow gauge lines is being examined. Further, treatment of timber to prolong the life of sleepers should be adopted more extensively. The Railway Plan provides for the creation of two new depots for creosoting of timber at Clutterbuckganj and Coimbatore in addition to those already in existence at Dhilwan in the Punjab and Narkatia i"n Assam.

22. While rehabilitation is indeed the primary task, there are also problems arising from the oblignt ons of the railway system as a public utility concern. The urgent problem of removing overcrowding needs no reiteration. In view of the enormous increase in the volume of passenger traffic, perceptible relief to overcrowding can come only with more coaching stock becoming available and permitting the operation of more passenger services.

Railway Development Under the Five Year Plan

23. For many years there has been considerable demand for improved amenities at railway stations as well as in trains. The inconveniences and difficulties of passengers travelling by the third class have been ventilated in Parliament and outside. Measures for improving the comforts and conveniences in travel, particularly in the lower classes, are now actively in hand. In accordance with this policy, a bulk provision of Rs. 3 crores is being made each year for passenger amenity schemes.

24. There is also the problem of coping with the increase in goods traffic. The volume of goods traffic has been steadily increasing from year to year, reflecting ths effects of the progressive industrialisation of the country and the development of major projects. A significant example of the effect on rail transport of a new project is afforded by the Sindri fertiliser factory for which the railways have daily to move over a thousand tons of gypsum, a full train load, from the quarries in Bikaner to the site of the factory in Bihar. The distribution of the finished product throughout the country also calls for additional transportation. The opening of the Kandia port during the period of the Plan affords yet another instance. The linking up of that port with the hinterland will mean greater movement of transport from the new areas which await considerable development. Production has been on the increase in the many fields of industry, such as coal, sugar and jute and in accessory raw materials required by these and other industries. All these represents a substantial increase in transportation required for the haulage of raw materials to the factory sites and of the manufactured products to the centres of consumption or ports for export. The execution of other major development projects will similarly impose heavy additional demands on the transport system. The assessment of what the impact of development programmes would be on the transport economy of the country in general, and the railways in particular, is a continuous one and this aspect should receive close attention.

Financing the Railway Plan

25. In order to overtake the accumulated arrears of maintenance and rehabilitation and to provide for an immediate programme of development for meeting the minimum obligations of the railways as a public utility concern, it is considered that the Railway Plan for the five-year period should provide for an average expenditure of not less than Rs. 80 crores a year or Rs. 400 crores in the aggregate. The bulk of the proposed allotment ofRs. 80 crores a year will be taken up by rehabilitation. This will enable the railways to handle more efficiently passenger and goods traffic at around present levels. The provision in the Plan for new lines's about Rs. 20 crores. The increase in industrial activity in the country as a result of the Plan will make increasing demands on the railway system. In the case of certain expansion schemes, such as for iron and steel or for mineral development, the expenditure needed for providing the necessary railway facilities will have to be treated as part of the expenditure on the project concerned. It is not possible at this stage to estimate precisely the requirements of the railways in respect of all the additional demands that might be made on them but it is intended that out ( fthe lumpsum provision ofRs. 50 crores in the Plan for further expansion of basic industries and transport, the railways will get the necessary allocation.

26. Of the total expenditure on the Railway Plan ofRs. 400 crores, the contribution from the Central revenues will be Rs. So crores, the balance of Rs. 320 crores being raised by the railways from their own resources. Stated on an annual basis, this means that as against a contribution of Rs. 16 crores a year from the Central revenues, the railways are required to find from their current revenues, on an average, Rs, 64 crores a year. This, on the present estimates, would appear to be a reasonable target. There are, however, pressing demands on the railways for improvement of passenger amenities and reduction in overcrowding which are likely to result in considerable increase in the working expenses. The policy of the railways during the period of the Plan should be to keep down the working expenses to the lowest level compatible with efficiency and reasonable standard of service in order that the necessary surplus for financing the development programme becomes available. The programme in hand represents, in the judgment of the Ministry of Railways, the minimum that must be seen through, so that if there is an unavoidable shortfall in the resources, it may become necessary to draw further on the reserve funds.

27. The expenditure of the railways during the period of the Plan, according to the present calculations, is to be phased as shown in the table appended to this Chapter.

2. shipping

28. The importance of shipping in a country with a long coast line and a large maritime trade can be easily appreciated. A mercantile marine is a second line of defence in times of crisis. It serves not only as an auxiliary force but also as a training ground for the navy, besides being indispensable for the carriage of essential supplies from overseas in times of war. In view of the importance of shipping under national flag, the coastal 'rade of the country was reserved in 1950 for Indian vessels in response to a public demand which had been made for the past 25 years. The Central Government have undertaken the major share of the responsibility for the training of the personnel for the merchant navy. They have'also taken over the shipyard at Visakhapatnam in order to foster shipbuilding.

29. The Shipping Policy Committee (1947) had recommended that the target for Indian shipping for the subsequent five to seven years should be a total of 2 million tons and had suggested the lines on which this was to be done by Indian shipping in the various ear and distant trades. This target nas not been chieved although the total Indian-owned tonnage, which was 125,000 G.R.T. before the war and loo.cco G.R.T. in 1946, increased to 362,150 G.R.T. bythe end of 1950. Including the Moghul Line tonnage, the total Indian registered tonnage is 417,257 G.R.T. Early in 1951, there were 73 ships with a gross registered tonnage of 217,202 on the Indian coast and 24 Indian-owned ships of a total gross registered tonnage of 173,505 in the overseas trades. Some minor ships, though registered, are not active. More than half the coastal fleet is over 20 years of age.

30. An expansion of tonnage is necessary, firstly, to implement the policy of coastal reservation, and, secondly, to ensure fuller participation in the overseas trade. The shipping companies, however, are in need of financial assistance because of the condition of the investment market during the last three years and the fact that these companies, most of which were started recently, have not been able to build up any significant reserves. Taking into account the financial resources available a programme of development is formulated which aims at increasing the total gross registered tonnage in the coastal and overseas trades to about 600,060 by the end of the period of the Plan. Some assistance may be forthcoming from the International Bank for Reconstruction and Development for the acquisition of additional tonnage, especially in view of the importance of carrying foodgrains, but whether, this materialises or not, it is essential that the programme of expansion indicated below is implemented.

Coastal Shipping

31. In order to assist the shipping companies in replacing obsolete tonnage operating on the coast, the Central Government have provided funds for construction of ships at the Visakha-patnam shipyard. A total of 100,000 G.R.T. is expected to become available from this shipyard during the period of the Plan. Out of this, about 60,000 G.R.T. will be utilised for replacement of obsolete tonnage and the balance for providing additional tonnage mainly for the coastal trade. Ships from the Visakhapatnam shipyard will be sold to the shipping companies at reasonable prices. The difference, if any, between the cost of construction and the sale price will constitute the subsidy to the ship-building industry. The expansion of tonnage is thus 'inked with the development of the shipyard at Visakhapatnam so that its capacity is fully utilised.

32. In order to make coastal reservation effective, the total tonnage required is estimated at 300,000 G.R.T. This also covers the requirement of near trades, e.g., India-Pakistan, India-Burma and India-Ceylon. The output of the Visakhapatnam shipyard will help in replacing part of the existing tonnage engaged on the coastal trade and also in supplementing it. A provision ofRs. 4 crores as loans to the shipping companies has been made in the Plan. The shipping companies themselves may be expected to raise a sum of Rs. 2 crores. It is hoped, therefore, that with an amount of Rs. 6 crores, a substantial portion of the necessary additional tonnage will be acquired. However, in view of the prevailing high prices, nearly 50 to 75 per cent of the additional tonnage will have to be second-hand.

Overseas Shipping

33. Additional tonnage will have to be acqu'red to enable Indian shipping companies, engaged in overseas trades, to participate more effectively in certain routes (India-U.K./Europe, India-U.S.A., India-Australia) in which they operate today and in order that they may participate in others, such as, India-Far East-Japan routes. In some of these routes they have commi ments with the shipping confer:nces as to the tonnage to be added by a certain date. In consultation with the representatives of the shipping companies and the M'nistry of Transport, the minimum requirement of additional shipping for overseas trade has been placed at about 100,000 d.w.t., excluding 60,000 d.w.t. required by the Eastern Shipping Corporation for which a sum of Rs. 4.4 crores to cover the Government's contribution has been provided. The additional tonnage for overseas trade will be acquired from the loan of Rs. 6 "5 crores provided by the Government and supplemented by an amount ofRs. 2 • 2 crores to be advanced by the shipping companies.

Rate of Interest on Loans

34. The shipping companies have urged that the ability to utilise loans provided in the Plan is dependent on the rate of interest charged. This is more so in the case of the companies engaged in overseas trade who have to face keener competition than those engaged in coastal trade, which is sheltered on account of coastal reservation. We agree that there is justification for a lower differential rate of interest on loans for purchase of tonnage for overseas routes. Such rates may involve an element of subsidy to shipping and it may be necessary to have the standard costs examined.

Fiscal Concessions

35. The shipping companies have suggested that the following concessions should be allowed to enable them to raise the necessary finance for replacing obsolete tonnage and acquiring additional tonnage according to the programme :—

  1. Profit on sale of old ships may be exempted from taxation on condition that the entire sale proceeds are utilised for'replacing the vsssels.
  2. Depreciation allowances admissible for taxation purposes should be related to original cost or replacement cost, whichever is higher.
  3. The shipping companies should be entitled to seek assistance from the Industrial Finance Corporation.

The fiscal concessions envisaged at (a) and (fc) are of a general character. A uniform policy has to be followed in regard to all industries in such matters. The suggestion at (a) may, however, be examined in view of the high cost of the main asset of this particular industry, namely a ship. As regards the third suggestion, legislation to enable the Industrial Finance Corporation to assist the shipping industry is under consideration.

Programme of Acquisition of Tonnage

36. Additions to Indian tonnage during 1951-52 consisted of a total of 18 ships of an aggre gate G.R.T. of about 57,000, which includes, besides three ships built at the Visakhapatnam shipyard, one large ship built in the United Kingdom for the Scindias, one each purchased second-hand by the Bharat Lines and the New Dhodera Steamship Company with the aid of Government loans, two new diesel ships built in Japan for the Great Eastern Shipping Company, two second-hand ships purchased by the Scindias from the United Kingdom and eight small ships purchased second-hand by various small companies. As against these additions three Indian ships of an aggregate G.R.T. of 14,000 were sold to foreign buyers and one ship of about 1,000 G.R.T. was lost, so that the net increase came to 42,000 G.R.T.

The following table shows the programme for the acquisition of shipping tonnage duringthe period of the Plan :

Additional Tonnage

Financial Total

Investment Foreign
exchange (Rs. crores)

Coastal Trade
(i) Tonnage from Visakhapatnam shipyard 100,000* 9-0 Nil
(ii) Additional tonnage 65,000 6-0 6-0
Overseas Trade
(i) Additional tonnage (100,000 d.w.t.) 70,000 8.7 8-7
(ii) Ships for the Eastern Shipping Corporation; 40,000 6-0 6-0

* 60,000 G.R.T. would be for replacement of over-aged ships.

38. At the end of the Five-Year period, the tonnage in the coastal trade would be about 315,000 G.R.T. and in the overseas trade 283,000 G.R.T. totalling about 600,000 G.R.T.

39. Since the Central Government will be extending financial assistance to shipping companies in order to expand their tonnage, a continuous watch will have to be maintained with a view to ensuring that the coastal rates of fre{ght and passenger fares are reasonable, that the companies make adequate provision for purposes of replacement and renovation and that the management is efficient and progressive.

Nature and Quantum of Expansion Based on Foreign Assistance

40. The provision made for shipping will not meet all the requirements in the coming years, e.g., replacement of all overaged passenger ships, the nucleus of a tanker fleet in connection with the projected oil refineries and the acquisition of a certain volume of tramp shipping, which is of considerable value in importing foodgrains and in similar duties in times of difficulty.

These requirements should be borne in mind in diverting unutilized amounts from the funds earmarked as loans to the shipping companies as well as any additional amount that may become available through foreign aid. This does not mean the shipping industry will be relieved entirely of their share of 25 per cent or 33-1/3 per cent, as the case may be, of the cost of meeting these requirements. In the case of tankers, however, the Government may have to meet the entire cost themselves.

Sailing Vessels

41. According to the Sailing Vessels Committee's Report published in 1949, sailing vessels continue to carry a substantial volume of cargo. The Committee has estimated that 150,000 tons of shipping under sail consisting of about 2,600 vessels carry about a million to a million and a half tons of cargo every year. Taking the average cost of these vessels at Rs. 250 a ton, the capital outlay on sailing vessels is estimated at Rs. 4 crores. These vessels employ about 40,000 men, namely, 2,500 masters, 2,500 mates and about 35,000 seamen.

42. It is certain that there will be scope for sailir -ssels on the Indian coast for some years to come. Having regard to the volume of cai carried by sailing vessels every year, the capital invested and the number of seamen employed, it is desirable to place the sailing vessels industry on a sound footing. The need is not so much to embark upon large-scale expansion of tonnage under sail as to reorganise the industry on a rational basis in order to increase the effectiveness of the existing tonnage. It is necessary that uniform rules and regulations should be prescribed for the registration of sailing vessels and for the tonnage measurement of such vessles. Steps should be taken for the assignment of free board for sailing vessels according to some simple formula. It is also desirable that life-saving appliances and safety standards applicable to sailing vessels should be improved. Coastal traffic under sail should be reserved for vessels of Indian registry. The procedure for lodging protests involving loss of life or cargo or damage to cargo by jettisoning or otherwise requires to be tightened up. Effective methods of investigating such cases should be introduced. Encouragement should be given to the fitting of sailing vessels with auxiliary engines. The personnel employed on sailing vessels should be required to undergo suitable tests to ensure a minimum standard of proficiency. Such personnel should also be included in the welfare schemes for other seamen. Port and repair facilities for sailing vessels should also be improved.

43. To give effect to these suggestions, the services of a full-time officer and adequate staff will be required. A special organisation under the Director General of Shipping has been set up recently for the purpose.

Co-ordination of Shipping with Other Transport Agencies

44. Movements of goods between port and port are effected by both railways and coastal ships. Country crafts compete to a certain extent with ships in the coastal trade. Although competition between these agencies of transport may not be serious at present owing to bottlenecks in che railway system and insufficiency of coastal shipping, possibilities of keen rivalry exist when conditions are normal. Measures such as reservation of transport of certain commodities to sailing vessels and co-ordination of traffic between railways and coastal ships may have to be taken in futuse for utilising the various transport services to the best possible advantage.

Technical Training

45. The importance of technical training for securing the necessary pool of officers, engineers and crew for Indian shipping has been recognised in the plan which provides for an expenditure of Rs. 1.10 crores for training schemes for marine engineers and merchant navy ratings.

Lighthouse Development

46. Lighthouses are important ancillary facilities provided for shipping. Though Partition has brought about a shrinkage of the coastline under the charge of the Central Lighthouse Department, the subsequent Federal Financial Integration has acted in the contrary direction and increased its responsibilities. At present, there are 120 lighthouses along a coast of 4160 miles (including Andaman Islands) under the direct charge of this Department. In addition, there are lighthouses called " local " lighthouses maintained and administered by port authorities or the State Governments concerned. The total number of lighthouses now exceeds 1700. It has been decided that all these aids to navigation should be brought on to a Central Register and gradually taken over by the Centre as the Constitution has classing this subject as a Union responsibility.

47. Many of these lighthouses, particularly in the former Princely States, require immediate improvement and a plan estimated to cost Rs. i -o crore has been formulated. Over the next five to seven years, the Lighthouse Department visualises a development expenditure of about Rs. 2.5 to 3.0 crores. This excludes the requirements of Andaman and Nicobar Islands where aids to navigation are reported to be hardly existent and for which plans have yet to be drawn up.

48. A sum of Rs. 2.0 crores is estimated to be required during the period of the Plan for the projects mentioned above as well as for the purchase of one out of two lighthouse tenders required for catering to the needs of the East and the West Coasts. The ready availability of tending facilities is indispensable since stores, provision and personnel have to be carried to lighthouses situated in the sea which also require attendance of working parties for repairs and other services. For enabling the Lighthouses Department to implement this programme, a loan of Rs. 0-8 crore has b;en provided for in the Five-Year Plan. The balance of Rs. 1.2 crores will be secured partly from the General Reserve Fund and the Depreciation Reserve Fund partly by increasing the levy of light dues progressively to three annas in the first instance, and subsequently to four annas per ton. Amendment of the Indian Lighthouse Act, 1927, will be necessary and should be undertaken for enabling the Lighthouse Department to increase the rate of light dues from two annas per ton which is the maximum permissible ai present.


Ports in India's National Economy

49. Ports are the gateways of foreign trade and commerce of a country and they serve its maritime transport and play a vital part in the national economy. After Partition, India's foreign trade is carried on through the five major ports of Calcutta, Bombay, Madras, Cochin and Visakhapatnam. The loss of Karachi threw an additional strain on the Bombay port to which a part of the traffic previously handled by the Karachi pore had been diverted. The present capacity of the five major ports to handls cargo is about 20 million tons per annum excluding petroleum, country-craft and bunkers. As against this capacity, they handled about 20 million tons during 1949-50 including petroleum and country-craft traffic, which sh3ws that there is at present no reserve capacity for coping v/Ith a possible expansion of trade in future. Even now the capacity is not sufficient to meet the demands of peak traffic.

Need for Port Development

50. Further expenditure has to be incurred on port developmsnt during the period of the Plan owing to the following reasons :

  1. There is need for rectifying the consequences of Partition and providing a natural outlet for traffic previously catered for by Karachi. It is mainly for this reason that the development of Kandia as a major port was recommended by the West Coast Major Port Development Committee. The recommendation was accepted by the Central Government and the project taken up for implementation in 1949. The port will cater to the vast hinterland of the Punjab, North Western and Central India more economically than Bombay through a reduction of about 200 miles in transportation. Uptil the 3ist March, 1951, a sum ofRs. 0-9 crore had been spent on this project. This scheme "has also significance from the viewpoint of rehabilitation of displaced persons from Sind.
  2. A large part of the equipment of ports was intensively used during the war and is now antiquated and obsolete. The dock systems in the ports also need to be modernised. Postponement of renovation and modernisation of these ports would result in slow turnround of ships and economic loss to the country.
  3. The Central Government have undertaken to provide port facilities for the petroleum refineries proposed to be set up at Trombay (Bombay) by the Standard Vacuum Oil Company and the Burmah-Shell Oil Company. As the refineries are expected to go into production before 1955, it is necessary to give a high priority for the provision of oil discharge facilities.

Capital Expenditure for Modernisation and Development During the Period of the Plan

51. In consultation with the port authorities, the Ministry of Transport have worked out a programme of rehabilitation, modernisation, and expansion of the five existing major ports at an estimated cost ofRs. 29-27 crores, consisting of schemes considered eligible for assistance from the Central Government. This estimate is exclusive of an expenditure of Rs. 12 -05 crores on the Kandia port and of Rs. 8.0 crores on the creation of port facilities for the oil refineries and of alternative facilities for the existing establishment on the Butcher Island. If all these projects are taken up, the development expenditure on ports during the period of the Plan will come to about Rs. 54 -22 crores. This includes an amount ofRs.4-90 crores spent in 1951-52 by the port authorities.

Programme of various ports

52. The development of Kandia as a major port will increase the trade handled at this port from about 122,000 tons during 1951 to about 850,000 tons per annum from 1956. The major items in the programme for the Calcutta port are restoration of the Garden Reach Jetty, purchase of wagons, locomotives and a heavy lift crane for handling heavy machinery and equipment imported for use on the river valley projects and construction of two manual coal berths and one mechanical ore berth. The important part of the programme for the Bombay port relates to modernisation of the Princes' and Victoria docks, reconstruction of transit sheds therein and installation of electric cranes at the Alexandra docks. Provision has also been made in the plans of the Bombay, Madras and Calcutta ports for housing of labour. The programme for the Madras port envisages, apart from other less important projects, a wet-dock scheme costing Rs. 2 -97 crores during the period of the Plan and two all-weather berths for petroleum oil at a cost of Rs. 0-72 crore. The plan for the Cochin port provides, among other schemes, for the construction of new berths for general cargo at a cost ofRs. I '6 crores. Developments at the Butcher Island include the construction of a pier, an approach treastle and five pipe lines.

Financing of the port development Projects

53. The administration of major ports is carried on by different agencies. Whereas the Bombay, Calcutta and Madras ports are administered by statutory port trusts, Cochin and Visakhapatnam ports are administered by the Central Government in the Ministry of Transport and the Ministry of Railways respectively. All the major ports are non-profit making, self-financing undertakings with funds of their own which do not enter into the accounts of the Central Government. An examination of the reserves at the disposal of the different port-authorities shows that they represent only a small fraction of the total finance which is essential for the modernisation and development of the ports. It is possible to augment the resources of the ports to a certain extent by raising port charges but the policy of raising additional finance by this method will have to vary with different ports, depending upon the surcharges already in force and the scope for further increase. There is a limit to this method because any excessive enhancement of rates on basic materials and foodgrains will tend to increase costs of industrial production and the price of commodities to consumers. It is also not possible to increase the incidence of port charges beyond a certain point in respect of commodities exported as that would react adversely on the volume of exports. Finance for development of ports will, therefore, have to be found:

  1. by drawing on the existing reserves of ports ,
  2. by increasing port charges to the extent possible , and
  3. by direct central assistance in the form of loans.

54. Excluding the Kandla Port Development Project which will be financed wholly by the Central Government, a sum of Rs. 42-17 crores will be required for expenditure on all the projects of the port authorities. It has been estimated that the maximum that can be raised by them by the first two methods is Rs. 15-5 crores, including the expenditure already incurred in 1951-52. If all the projects now contemplated are to be taken up, assistance will have to be given to the ports to the extent ofRs. 26 -67 crores. So far the ports have been depending on loans, raised from the public or granted by the Government for their large capital works. The quantum of the Government assistance will be reduced to the extent that the port authorities can raise loans in the open market as in the past. It has, however, been pointed out that this source is restricted because there is a limit beyond which the port authorities cannot increase charges for services rendered in order to enable them to pay interest on loans.

55. The Plan provides for an advance ofRs. 12 crores by the Central Government to the port authorities during the Five Year period. In addition, the Central Government will also accept the liability for the creation of port facilities connected with the oil refinery projects at a total cost ofRs. 8 crores. The port authorities have suggested that the loans should be interest free for a period of 12 years at the end of which they should be repayable in instalments together with interest at a reasonable rate. In the broader public interest, the development schemes of ports will have to be financed and for this purpose loans will have to be advanced to the port authorities. Whether ordinary terms can apply to such loans should be carefully examined by the Ministry of Transport at an early date. If the examination shows that there is .i case for assistance in the form proposed, It should be made available.


Progress of Civil Aviation in India

56. India is favourably situated for the development of air transport, both internal and international. In the internal field, with her vast distances and good flying conditions during the greater part of the year, there is considerable scope for this mode of transport. Almost all the important administrative, industrial and commercial centres of the country are at present connected by air. The night air services which connect the four principal cities form an important part of the airline net-work and fill a long felt need. There is, however, room for more intensive operation on the existing main routes as well as extension to less important towns. In the international field, India occupies geographically an important position in the air routes between the East and the West. This throws upon the Government of this country the obligation to maintain ground services of prescribed standards for the use of the international air services. International services are also being operated by India, both to the West and the East. Further, civil air transport can play a vital role in emergencies, as was evidenced in the evacuation after Partition and in West Bengal and Assam in 1949-50, as well as in relief and other operations in Assam after the earthquake and floods. Finally, the defence aspect of civil aviation should not be lost sight of. All civil aviation equipment, personnel and organisation constitute in effect a reserve for the defence services, which can be mobilised quickly and made available during an emergence For these reasons the future plans of development have to take into account the growing needs of civil aviation. Roughly, the capital expenditure on civil aviation development till the end of 1950-51 was of the order of Rs. 10 crores. The expenditure was for provision of aerodrome organisation, including runway, hangars, passenger buildings, lighting, etc.; communication organisation which included radio aids for air navigation ; inspection organisation which related to the supervision and check of airworthiness of aircrafts and other technical equipment and competence of personnel; and training organisation which included the Civil Aviation Training Centre at Allahabad.

57. As part of their post-war plans of development, the Central Government had drawn up a plan for developing, controlling and regulating air transport. The main features of this plan were as follows :—

  1. the development and operation of air transport services would be left toprivate commercial organisations
  2. the operation of scheduled air serv ces would be subject to licensing by a body called the Air Transport Licensing Board to be set up for the purpose
  3. all the main air services in India should be operated by about four companies , and
  4. the Government might give financial assistance to the operating companies in specific cases.

58. At the end of the war, many companies were floated for the operation of air services. The wartime boom in air traffic had created an impression that commercial air transport operation was a very profitable enterprise, especially as war surplus stocks made available certain types of aircraft at very low prices. These conditions gave an impetus to the floatation of aviation companies and a number of applications were made to the Air Transport Licensing Board for licences for i:ne operation of internal air services. By the end of 1949, nine companies had been granted such licences. It soon became apparent, however, that the financial condition of most of the companies was not reassuring. The Central Government appointed a committee—the Air Transport Inquiry Committee—to investigate the financial condition of the companies and to make recommendations for putting the air transport industry on a firm basis and for developing commercial air transport on sound lines. From the report of this Oommittee, it is evident that the financial position of the industry as a whole is far from satisfactory and that the main reason for this is that the number of operating units is larger than that required to conduct the available volume of air transport business on an economic basis. The Committee has made recommendations for improving the existing position and the Government are taking steps to give effect to many of them.

59. The development plan for civil aviation projects during the next five years, excluding operation of air transport industry discussed below may be considered in two stages, namely, for the first two years of 1951-52 and 1952-53, and for the next three years of 1953-54 to 1955-56. For the first two years, the amount of capital expenditure allotted is Rs. I -85 crores per unnum. This is made up of about Rs. i -5 crores per annum for work and the rest for equipment. For the second period of three years, the total allotment made is about Rs. 9-67 crores. The expenditure will have to be properly phased during the period, the amount to be spent during the last year being in the neighbourhood of Rs. 4 crores. About 70 per cent of the allotment is in respect of work, the remaining being for several items of technical equipment.

Aviation Policy

60. Of late important aspects of the air transport industry have been examined by the Government. For arriving at more precise estimates of replacement requirements, the selection of the aircraft that should replace the Dakota and the Viking, and the methods of financing the purchase of aircrafts, the Director-General of Civil Aviation, Ministry of Communications, held a conference with the representatives of the airline operators in January, 1952. It was agreed at the conference that for operations on semi-international and trunk routes, the Dakota should be replaced by a more modern type of aircraft. Such replacement of the Dakota on the main routes was considered necessary to enable the air transport industry to compete on even terms with foreign air lines operating on these routes. Further, this step would keep the country in touch with the latest development in aircraft design in other parts of the world and also give the necessary training in the servicing and overhaul of new types of aircraft to the technicians in the country. Various factors involved in the question of expansion of air fleet vis-a-vis the development of the Hindustan Aircraft have also been considered. It has been found that the expansion programme of civil aviation should be dealt with, for the period of the Plan, independently of the programme of development of the Hindustan Aircraft, although eventually these two programmes will have to be co-ordinated.

61. The requirement of new aircraft before the close of the period of the Plan is estimated at 20, valued at Rs. 10 crores as under:

(Rs. crores)

2 aircrafts for the Air India International's Western Services and 3 aircrafts for the Bharat Airways Eastern Services 4.5
15 aircrafts for shorter services and major trunk routes in India 6.0

The airline operators represented that they would require assistance by way of loan from the Government equivalent to two-thirds of the total amount, viz., Rs. 7 crores at a concessional rate of interest for acquiring such aircraft,

62. Enquiries have shown that under the present conditions of traffic load and intensity of operations the existing air transport companies cannot work on an economic basis. With the introduction of the more modern aircrafts mentioned above which will be larger and faster and also more costly, economic operations will be possible only if the existing companies merge into a single unit. A single organisation in charge of internal as well as external operations can handle all the existing traffic with a smaller number of aircraft and also save in overheads and in other directions. Under a single organisation, for example, the requirements of additional aircraft for internal as well as external services will be about 13, instead of 20 mentioned above. The agency for operating the services should be a statutory corporation in which the shareholders of the existing companies may be allowed to participate pro rata, if they wish to do so in exchange for their present holdings the value of which should be determined on an equitable basis. The Central Government's share in the corporation should be large enough to ensure control over the industry.

63. The Plan provides for a sum of Rs. 9-5 crores : (a) for the purchase of 13 aircrafts, three of which would be of the type required for long-distance international air services, and (V) fot the payment of such compensation as may be found necessary for acquiring the assets of the existing companies. If the existing air-companies agree to take up shares in the new corporation in exchange for their present holdings, the amount needed will be of the order of Rs. 6.5 crores.


State of Road Development

64. Roads are a service for all forms of development, whether of agriculture, trade, or industry. In the development of roads, a national conception is necessary not only because of their strategic importance but also because of the need for co-ordination between different types of roads. This was recognised in the Nagpur Plan which emphasized that the schemes drawn up by the Centre and the States should be based on the consideration of the road system of India as an integral whole ; and that development should be balanced as between different categories of roads and should proceed in a planned sequence, having regard to the requirements of traffic.

65. Taking the area of the country and the population into consideration, the total mileage of roads in existence at present is admittedly short of requirement. After the advent of the railways, development of roads did not receive adequate attention until the constitution of the Central Road Fund in 1929. Since then, the achievements have been significant. According to the report of the Motor Vehicle Taxation Enquiry Committee (1950), no fewer than 382 new bridges and causeways had been built and 1250 miles of modern surface roads, 1500 miles of fair weather roads and 2200 miles of road reconditioning completed upto the time of their enquiry. The assurance of a continuous supply of funds under this scheme has been an important factor contributing to the progress made. Nevertheless, owing to the expansion of motor transport that has taken place during the last 30 years and developments in the field of industry and trade, the road system in existence is not adequate and there is need for substantial road development being undertaken in future years. The modern motor transport requires roads, with easier curves, wider formations, stronger crusts and smoother surfaces, which are not necessary for other community uses of roads. The number of motor vehicles on the road is steadily increasing and the weight and range of transport vehicles is appreciably greater than it used to be.

66. The Nagpur Report on the Post-War Road Development of 1943 (the Nagpur Plan) visualised the development in a period often years of a total mileage of hard-surface roads from about 66,400 miles to 122,000 miles ; of low type roads from about 112,000 to 207,500 miles and the improvement of existing roads, wherever necessary, so that the road system would cater for anticipated traffic needs for the next 20 years. The objective underlying the Nagpur Plan was that no village in a well-developed agricultural area should remain more than 5 miles from a main road. It was a fundamental of this programme that no road should be considered by itself, but as a part of a network and that no road surface should be of a higher standard than was required to carry the existing traffic or traffic anticipated in the immediate future.

67. The expenditure contemplated in the Nagpur Plan was of the order of Rs. 372 crores, of which Rs. 66-5 crores related to national highways and Rs. 305-5 crores to other roads at a price level 50 per cent over pre-war costs; but taking a level of 200 per cent. over the pre-war cost as an estimate nearer to p; csent day price levels, the expenditure target for the programme contemplated will be Rs. 744 crores of which Rs. 133 crores will be for national highways and Rs. 611 crores for other roads.

68. Owing, however, to shortage of materials, scarcity of trained men, and above all to financial stringency, the programme visualised under the Nagpur Plan had to be spread over a longer period of years. As a result, an expenditure ofRs. 27-1 crores incurred in the States during the 3 years ending the 3ist March 1950, represents only about 5 per cent. of the Nagpur Plan target figure. An expenditure ofRs. 9-3 crores on national highways in the five year ending in March, 1952, shows somewhat better progress at 15 1/2 per cent. of the corresponding target figure.

Priorities Under the Five Year Plan

69. Priority in the development of roads has to be determined in relation to plans of development in other spheres in the light of national and local resources and needs. Roads which assist production, and especially agricultural production, should have a high priority in existing conditions. This has been recognised by some of the States, such as Uttar Pradesh, where development of roads forms a part of the schemes of rural reconstruction. It is evident that such roads as are feeders to railways or which relieve congestion to certain junctions and help to open up the country, have to be given preference. Priorities within the State have to be determined by the State itself and obviously such priorities would tend to differ in different States. In West Bengal, for instance, owing to the partition of the State, construction of roads has a particularly high priority. Many of the previous roads were from east to west while now they have to connect north and south, without which certain ' pockets ' cannot be easily reached and their surplus products cannot be made available to other parts of the State.

National Highways

70. The Nagpur Plan recommended the classification of roads according to their functions. Thus, roads were divided into National Highways, State Highways, Major and Minor District Roads, and Village Roads. National Highways are " main highways serving predominantly national, as distinct, from State purposes, running through the length and breadth of India, which together form a system connecting (by routes as direct as practicable) major ports, foreign highways, capitals of States and including highways required for strategic movements for the defence of India." Subject to certain conditions embodied in the National Highway Scheme, the Central Government assumed financial liability with effect from the ist April 1947 for the development and maintenance of a provisional system of national highways limited to a length of about 13,400 miles.

71. The mileage originally included (in 1947-48) approximately 1,600 miles of "missing" road-links and about 120 "missing" bridges over very large rivers in addition, to many other bridges, large and small. In the last five years, 160 miles of new roads and seventeen very large bridges with numerous smaller bridges have been constructed and 1,315 miles of road have been improved. There are at present under construction about 320 miles of new roads and eighteen large bridges. The Five Year Plan provides for the completion of the work in hand and the taking up for construction of 450 miles of new roads and 48 very large bridges besides a large number of smaller bridges. In addition, about 2,200, miles of roads are to be improved. Of this programme, about two-thirds will be completed by 1955-56 and the rest will be in progress. Many of the existing bridges are not capable of carrying heavy loads and require reconstruction. This work, however, will be taken up [except as mentioned in para. 73 (3) below] only after all the " missing " road links are built and the unbridged rivers spanned.

72. A sum ofRs. 27-00 crores over a period of five years has been provided in the Central Government's plan for the development of national highways including the probable expenditure on the road element in the proposed rail-cum-road bridge during this period. A separate provision of Rs. 4-24 crores has also been made in the Central Sector for the development of certain selected roads (other than national highways) for which financial liability has already been accepted by the Centre. Further a sum ofRs. 21-15 lakhs has been provided for the Central Road Research Institute where investigations of interest for road development in different regions of the country is to be carried out.

73. The priorities for the National Highways Jive-year development programme have been fixed on the following basis :—

  1. Completion of all capital works already sanctioned and in progress.
  2. Provision of new bridges and missing road links, as far as possible, along the " arterial " national highways. (The arterial national highways are those that connect the main population centres plus a few whose development has been given priority as a result of Partition).
  3. Urgent replacement or strengthening of existing dangerous bridges and improving sections of existing roads that are uneconomical to maintain or dangerous to traffic.

With the funds provided in the Plan, it will not be possible to close all the gaps even in the arterial national highways—this work together with the development of the remaining national highways will have to be left for future plans.

State Roads

74. These are linked with national highways and along with them constitute a single road system. Their programme is determined by the States themselves though the Roads Organisation at the centre is consulted. Construction of State roads is' at present financed from State revenues, which are supplemented by the allocations and grants from the Central Road Fund. According to the schemes envisaged by the State Governments, the mileage of metalled roads will increase from 10,007 miles in 1950-51 to 12,453 miles by 1955-56 in the Part ' A' States and from 7,588 miles to 8,129 miles in the Part' B ' States. During the same period the mileage of unmetalled roads will be reduced from 2,199 to 757 miles in the Part' A ' States and 526 to 206 miles in the Part ' B ' States.

75. The Road development plans of the Part' C ' States are being framed with a view to providing for the construction of as many new roads as possible for opening up areas which are at present inaccessible, while improvement and reorientation of the existing roads to meet the changed administrative requirements and the economic development of the areas is also being given due emphasis.

76. The total provision for road development in the plans of the States is Rs. 73.54 crores, out of which the Part' A ' States account for Rs. 50-59, crores, and the Part' B ' States for Rs. 16.68 crores, the balance being accounted for by the Part' C ' States.

Village Roads

77. As regards village roads, the broad aim should be to connect the more important villages with marketing centres and district headquarters. The absence of a sufficient mileage of village roads is a serious drawback in the system of communications. The State Governments should pay special attention to the construction and maintenance of these roads and for this purpose enlist the co-operation of villagers. In certain States, village roads are, in fact, being developed with the active co-operation of the villagers themselves who contribute a portion of the cost of construction by way of free labour, free gift of land or money, the balance being contributed by the State Government or district boards. As a token of the Central Government's interest in the development of village roads, the Roads Organisation have formulated a 'model scheme' for village road development on a co-operative basis and has made an initial offer of a grant ofRs. 15 lakhs from the Central Road Fund Reserve as a contribution towards specific projects. There is considerable scope for development of village roads on co-operative basis by mobilising the local population for executing local projects.

78. The programme described above is exclusive of likely road development under the community development projects. Tentatively it has been estimated that 16,000 to 17,000 miles of kutcha roads will be constructed in the village units falling under those projects.

Finance for Road Development in the Five Year Plan

79. As already explained above, the principal difficulty in the development of roads in recent years has been the paucity of finance. The Motor Vehicle Taxation Enquiry Committee, 1950, have suggested certain measures for augmenting the resources for road development which should be considered by the Central and State Governments. The importance of continuity in the supply of funds with a view to avoiding wasteful expenditure and pursuing even modest programmes without interruption needs to be recognised by the Central and State Governments.

80. The bulk of the finance for road development will go towards acquisition of land, purchase -of materials, and payment of labour. The foreign exchange requirement for the purchase of machinery has already been considerably reduced with the manufacture of steam and diesel road rollers in the country. The Tata Locomotive and Engineering Company have, upto the end of February 1952, manufactured and supplied 830 steam rollers against an order for 950 units. Similarly, Messrs. Jessop and Company of Calcutta have manufactured and supplied all the 475 diesel road rollers ordered from them. At present, considerable foreign exchange is being spent for importing asphalt for black topping of roads. Imports fluctuated between 47,100 tons and 79,363 tons per annum between 1948-49 and 1950-51. With the establishment of petroleum refineries during the period of the Plan, asphaltic bitumen will be available from domestic sources from 1955-56 and this will result in a further saving of foreign exchange.


Emergence of Public Road Transport Services

81. The beginnings of commercial motor transport in India can be traced to about the year 1920 when the opportunity for its developn-.entwas created by the military vehicles rendered surplus after World War I. There was a rate-cutting competition among the private bus operators inter se and between road and rail transport agencies. By 1930, the large diversion of passengers from railways to roads resulted in considerable loss of railway revenues. The question of rail-road competition was examined in subsequent years and with the coming into force of the Motor Vehicles Act in 1939, a beginning was made in the direction of creating fair conditions of competition and controlling the development of road transport along proper lines. The acceptance in 1946 of the policy of encouraging the formation of transport undertakings on tripartite basis, viz., private operators, the State Governments and railways was the next significant development. The latest development in motor road transport is the formation of statutory transport corporations by certain State Governments under the Road Transport Corporation Act, 1948, subsequently replaced by the revised Aet of 1950.

82. At present, there are in the country approximately 47,575 operators of whom 25 own a fleet exceeding 100 ; another 50 exceeding 50 vehicles but not exceeding 100 ; and less than 1,500 operators, a fleet exceeding 5 but not exceeding 50 vehicles. There are more than 46,000 small operators, each owning 5 vehicles or less. State-operated services exist in varying scales in Assam, Bihar, Bombay, Madhya Pradesh, Madras, Orissa, Punjab , Uttar Pradesh, West Bengal, Hyderabad, Madhya Bharat, Mysore, Rajasthan, Saurashtra, Travancore-Cochin, Kutch, Himachal Pradesh, Mariipur, Bilaspur and Delhi. The pattern of management varies. In Orissa and Madhya Pradesh, the undertakings are managed by joint-stock companies. In Kutch, a non-statutory authority manages the services. In Bilaspur, Bombay and Delhi there are statutory bodies. In the other States, operation is undertaken depaitmentally. In Bihar, Hyderabad, Kutch and Mysore, it has been decided to set up statutory corporations under the Road Transport Corporations Act, 1950. The railways have participated financially in the undertakings in Bombay, Madhya'Pradesh, Punjab, and Orissa with a total contribution of Rs. 2-586 crores towards capital outlay, the State Governments' contribution being Rs.4-7crores.

83. State participation in public road transport is intended to achieve greater efficiency and economy in operation and management which a large number of small operators functioning separately will not be able to do. Only large organisations with adequate financial resources can provide the workshop and other facilities which are essential for rendering efficient service and realising the economies resulting from large-scale operation. The benefit of such economies can be passed on to the consumer as well as the transport worker if commercial road transport is under public ownership. While participation by the State Government in road motor transport services is thus-advantageous to the public, the displacement of private operators creates certain problems. Partly in recognition of this situation, the State Governments are generally pursuing a policy of nationalising road transport in gradual stages within the resources available. Certain State Governments have also made provision in their schemes for financial participation by private operators at their option. It is desirable for the existing private operators' units to amalgamate, wherever possible, into big, viable units to enable them to achieve better returns and maintain better standards of operation.

84. The programme of commercial road transport in the private sector is not available. As regards the public sector, the investment on public road transport services (capital at charge) as in June 1950 in all the States was nearly 12 -o crores and at present it stands at Rs. 17-13 crores. This investment is made up of contributions of the State Governments, railways and private operators.

Programme of State Road Transport Services

85. In the Five Year Plan, the investments of the State Governments on road transport between 1951 and 1956 is envisaged at Rs. 8 -97 crores. The investment of the Part A States on road transport services which was Rs. 8.33 crores in June 1950, is expected to increase by Rs. 5 -62 crores by the end of the period of the Plan. Whereas Assam, Orissa, West Bengal, Bombay and Uttar Pradesh are the States in which developments are envisaged, substantial expansions would be effected only in the last three States. The expenditure on road transport in these three States during the period of the Plan will be as much as 91 per cent of the total. Developments in the Part B States are restricted to Travancore-Cochin, Saurashtra and Rajasthan; and in the Part C States to Bilaspur, Manipur, Himachal Pradesh and Delhi. The expenditure in the Part B States is estimated at Rs. 0. 96 crore out of which Saurashtra will spend Rs. 0-53 crore and Travancore-Cochin, Rs. 0-42 crore; out of Rs. 2.39 crores allotted for road transport in the Part C States, the Delhi Transport Authority will be spending Rs.2.16 crores during the period of the Plan. About a third of the investment by the Delhi Transport Authority will be incurred on tramways.

86. The railways, as explained above, participate in the public road transport undertakings brought into existence by the State Governments. The present investment of the Central Government in the public transport services in various States is estimated at Rs. 3' 53 crores as against Rs. 1-55 crores at the beginning of the period of the Plan. It is envisaged that the Ministry of Railways will participate in road transport programmes of the State Governments but it is difficult to forecast at this stage what their investment on such undertakings during the period of the Plan will be. It is expected that the resources necessary for the participation of the railways in State transport undertakings will be found from the funds provided for the Railway Plan.

87. Investment on road transport in the public sector will be directed inter alia, to : (i) purchase of about 2,000 transport vehicles, and (ii) establishment by the bigger units like the State road transport services of Bombay, Uttar Pradesh and Delhi of up-to-date Workshops for maintenance, repair and overhaul of the transport fleet owned by them. Facilities for training operatives are also envisaged. Two points of importance arise in connection with the purchase of transport vehicles, viz., (i) standardisation of vehicles used by the State transport services and co-ordination of programme of replacement and expansion of transport fleet with the development of the indigenous automobile industry, and (ii) use of diesel versus petrol driven vehicles. These two issues have been referred by the Central Government to the Tariff Commission in connection with the investigation into the claim for protection for the indigenous automobile industry. The State transport services should adjust their programmes in accordance with the recommendations that may be made by the Tariff Commission. As regards the agency for running the State transport services, we are of the opinion that whenever road transport services are run by the State, a corporation should be formed for the purpose as that would provide the necessary autonomy and would lead to more efficient administration. The ground has been cleared for the formation of State transport corporations by the Road Transport Corporation Act, 1950, passed by Parliament.


The State of the Communication Services

88. The communication services in India, which comprise postal, telegraph, telephone and wireless communications, are provided by the Posts and Telegraphs Department, which next to the railways, is the largest department of the Central Government. The Department is responsible not only for the communication services for the general public but also for such specialised sections as the commercial community, the press, the railways, the canal administrations, and the defence services. It is primarily a public utility department but is run on a commercial basis so as not to be a burden on the general revenues.

89. The postal and telegraph facilities have been in existence in India for-a little over a century. The growth has been slow and steady but, having regard to the size of the country, development has lagged behind the actual requirement. The demand for these services during the ast few years has become very acute. The Department has been hard put to run the services with reasonable efficiency for the following reasons :—

  1. deterioration in equipment due to both excessive pressure and normal wear and tear during the war years and difficulty of replacement ;
  2. deterioration in the quality of the personnel ;
  3. heavy growth of traffic in all branches which has more than doubled itself during the last. decade ; and
  4. consequences of Partition, which caused considerable- dislocation.

90. Development in various sectors, private and public, under the Five Year Plan will throw an additional burden on the Department which will be called upon to provide communication services to an ever- increasing extent. The requirements of the communication system which include postal facilities, provision of adequate office building for posts and telegraphs offices, tele-communication development particularly in telephones, and modernising the posts and telegraphs workshops will have to be provided for.

Development Plans

91. One of the main pre-occupations of the Department is to extend communication facilities in the rural areas. During the last'five years considerable progress has been achieved in this direction. About 35,000 new post offices were opened. The aim is to have a post office in every village with a population of 2000 o* over. The Department expects to achieve this target by the end of 1953. But in a country predominently consisting of villages, rural facilities will have to be further improved and the programme will have to be continued. At the same time demand for increasing postal facilities in the urban areas will have to be met. To increase the efficiency in working, there is a programme of introducing mechanised devices on the lines of what obtains in some of the more advanced countries of the West.

92. Shortage of accommodation in the postal and telegraphs offices and the'consequent congestion has become so serious that unless concerted measures are taken quickly the efficiency of the Department will go down rapidly. It has already been stated that the traffic has more than doubled itself during the last decade, while practically no new construction has taken place (a) to accommodate the additional operative staff engaged in handling the increased traffic, and ( and ) to meet the requirement of the public in the shape of larger counters, etc. A large proportion of post offices is accommodated in rented buildings. In view of the considerable urbanisation that has taken place during and after the last war, it has become difficult even to rent buildings to accommodate these offices. Existing rented buildings have proved inadequate for meeting the situation and in many cases landlords are eager to terminate the tenancy. Further, the interest of the services requires that the bulk of the operational staff should live near their place of duty. This makes' it necessary for the Department to provide residential accommodation for them. The Department is, thus, faced with a large building programme, both in shape of posts and telegraphs offices as well as quarters for its staff.

93. The present telegraph network in India is comparatively meagre taking in o account the extensive area involved. The development Plan provides for the extension of tele-communication services to a larger number of centres. Modem mechanised methods in the handling and transmission of telegraphs traffic are being introduced. They will greatly improve the efficiency of the services and also result in economy in running its expenditure. The most insistent demand for development is in the fields of telephones. India is very backward in this regard ; it is even more backward than, for instance, China. The number of telephone lines in the whole of India is less than that in one city of Australia, vis., Sidney. There are long waiting lists in every city, big and small, for telephone connections. The development programme under the Five Year Plan whch will expand the economic acitivity all over the country will further swell these waiting lists. From the financial point of view the return on capital investment on the development of telephone facilities is substantial. For instance, at the end of the financial year of 1950-51 th . capital investment in telephone and telegraph services amounted to about Rs. forty eight crores and the net profit in that year in the two branches, after deducting interest on capital as well as depreciation and other working expenses, was Rs. 4 -6l crores which works out to a return of 9 • 6 per cent. If the interest charges at 2 • 3 per cent were added, the yield on capital invested amounted to n '9 per cent. The yield on the capital devoted to telephone development is proportionately greater since a smaller amount of money is committed to "no profit" schemes, like providing strategic lines, railway circuit, communications to in accessible, places, etc.

94. The posts and telegraphs workshops in Bombay and Calcutta are located in the centre of the respective cities and their working in such a location is not conducive to economic production. They do not afford room for expansion .which will become necessary almost immediately to meet the increasing demands of the Department. It will, therefore, be necessary to shift these workshops to more suitable localities as well as to modernise them so as to improve their efficiency.

95. The Plan provides an allotment ofRs. 50 crores for the development of the communication services including postal, telegraph, telephones and wireless communications.

The Railway Plan/or 1951-56 (in crores of rupees)

Rehabilitation and Additions 1951-52 (Approximate Actuals) 1952-53 (Budget) 1953-56 1951-56 (Five years' Total)
Track 8.51 14.36 42.00 64.87
Bridges 0.85 1.15 3.60 5.60
Other structural and engineering works 7.89 8.52 27.00 43.41
Collieries 0.06 0.39 1.00 l.45
Ports 0.09 0-l8 0-77 1.04
Rolling stock and machinery 36.91 42--55 128.50 207.96
Labour welfare—staff quarters and welfare works 4.55 4.54 15.00 24.09
Restorations 0.52 1.14 4.00 5.66
New lines
Special projects
Major bridges 6-55 5*97 16'00 28-52
Electrification of track
Conversion of narrow gauge to metre or broad gauge
Passenger amenities 2-47 3'00 9-53 15.00
Miscellaneous items, including probable savings 2-47 -2.70 2.63 2.40
total 70-87 79.10 250.03 400.00


The State of the Broadcasting Service

96. Prior to 1935, the Indian State Broadcasting Service operated with two mediumwave transmitters of 1.5 kw. power each in Bombay and Calcutta, and provided a broadcast coverage on the mediumwaves over 5,400 square miles serving a population of about 10 millions. In 1935, the organisation was renamed the All-India Radio. Since then a number of new stations both, mediumwave and shortwave, have been established in different parts of India. Immediately after Partition, there were in the Indian Union six stations which operated six mediumwave transmitters and four shortwave transmitters, excluding the high power shortwave transmitters in Delhi. The broadcast coverage provided by the mediumwave transmitters extended over 44,000 square miles serving a population of about 32 -6 millions. The shortwave transmitters provided a second-grade service covering about the same area and catering to about the same population. The high power transmitters that had been brought into operation'during the late war served to augment the internal service to some extent, besides providing a service to foreign countries. The broadcasting stations operated by the former Princely States were taken over by the Central- Government and merged with the Al1-India Radio broadcasting system in April, 1950. The present broadcasting system in ndia consists of 21 stations, operating 30 mediumwave transmitters and 14 shortwave transmitters. The area covered on the mediumwaves is now about 117,000 square miles and the population served is about 80 millions.

Programme under the Five Year Plan

97. The programme includes installation of 50 kw. mediumwave transmitters, one each in Bombay, Bangalore, Ahmedabad, Allahabad and Jullunder ; 10/20 kw. mediumwave transmitters one each in Madras, Indore and Hyderabad; i kw. mediumwave transmitter at Jaipur, Jodhpur, Gwalior and Rajkot; and 100 kw. shortwave transmitters one each at Madras, Bombay and Calcutta. In addition, new studio installations will be established in Calcutta and Madras^and the existing installations will be provided with more facilities. The 5 kw. medium-wave transmitter now at Barodawill be shifted to Poona on the installation of a 50 kw. transmitter at Ahmedabad. It may be stated that a 50 kw. transmitter came into operation in Calcutta in January, 1951, shortly before the commencement of the period of the Plan.

98. The new installations which are proposed to be taken up under the Plan, will serve to increase the area under mediumwave broadcast coverage to 370,000 square miles. The population served is expected to increase to 170 millions. The programme will also augment considerably the national and international services on shortwaves. There is a provision of Rs. 3-52 crores in the Plan or development of broadcasting.

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