budget & gambling

Business Briefing 27/02

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Railway Budget as Her Manifesto; All Bets are Off, Almost

Railway Budget as Her Manifesto

High-on-populism-low-on-vision is a fairly accurate descriptor for most things Mamata Banerjee does. And she stayed true to form in her avatar as the Railway Minister. In her second budget, widely expected to be her West Bengal  election campaign launch pad, there were few surprises. With no hike in passenger fares, freight rates and plenty of new trains passing through Howrah, Banerjee has kept her powder dry. In fact, she even slashed the freight rates on foodgrains and kerosene by Rs 100 per wagon, keeping food inflation worries in mind. She plans investments of Rs 41,426 crore, the highest ever, to provide an efficient, customer-focused and modern railway network.  Of this allocation, at tenth would go towards meeting the target of laying 1,000 km of new tracks. There’s plenty of ambition in her plans to raise Rs 10,000–20,000 crore in 2010-11 alone, with an added promise of introducing a 10-year ‘Vision 2020’ plan. Income from passenger traffic grew at a healthy above-GDP-growth rate of nearly 11 per cent, ringing in revenues of Rs 88,300 crore. “A special task force to clear proposals for investments within 100 days will be set up, policy guidelines will be made easy, simple and investment friendly, so that the business community can join hands to build a partnership with the Railways,” she said. But lest you think didi is selling out to private-sector profiteers, it comes with an ideology-coated caveat. “This does not mean that the Railways is going for privatisation, it will remain a government organisation.” Mamata Banerjee and her latest Railway Budget may never inspire Harvard dons to pen a case study, but may be good enough to catch votes.

All Bets are Off, Almost

What do Wall Street bigwigs who’ve lost more than their shirts in the financial crisis do? Down some Scotch and try to win some at the poker table? That certainly hasn’t happened. At gambling dens around the world, including Las Vegas, the chips are down big time. For the second time in history, Nevada’s nearly 300 biggest casinos posted a loss—a whopping $7  billion. The last time they made losses was in 2003 but it was a piffling $33 million in comparison. In its statement of accounts for 2009, Nevada state’s Gaming Control Board noted that while revenues from gambling and room occupancy crashed, receipts from the sale of alcohol increased, marginally. The report also shows that gambling is no longer the cash cow for casinos. Food and beverages provide better margins. The annus horribilis was accompanied by lay-offs, rendering 25,000 people jobless, and resort closures. While Las Vegas casinos have been losing popularity,  the scale of losses this year has shocked the state. So what’s Vegas betting on now? Indian gamblers.