Revitalising the Indian Railways

NEVER BEFORE HAS the need to revitalise the Indian Railways (IR) assumed greater importance as in its present state of rapidly declining financial health. With the return of Mr. Nitish Kumar as the Railway Minister, it is to be expected that the Railway Expert Group headed by Mr. Rakesh Mohan will regain its importance and submit its much-delayed report at the earliest. The changes in the country's economic administration since the appointment of the Committee in 1998, including the elevation of Mr. Rakesh Mohan as the Chief Economic Advisor in the Union Finance Ministry, should not diminish the priority to be accorded to improve the working of the Railways. On the contrary, it should help in bringing in a wider perspective to the final report of the Committee. The Interim Executive Summary of the Report of the Group of Experts setting out the broad thinking on restructuring the IR along corporate lines is to be seen as a welcome beginning of a serious effort to place the world's second largest rail system on the track to success. Among the more immediate tasks ahead for the IR is converting the monolithic departmental enterprise to one that operates on modern organisational principles. Working out appropriate costing techniques that reflect the true nature of Railway finances is another.

The suggestion to rechristen it as the Indian Railways Corporation (IRC) encapsulates the new thinking suggested for the IR. So do the proposals to supplant the present Railway Board with an Indian Railways Executive Board (IREB) and introduce an Indian Railways Regulatory Authority, as part of the road map to railway restructuring. However, given the distinct space occupied by the IR in the national setting - as a provider of mass transport, as an organisation fulfilling social obligations, and, more important, as an institution which traverses the social, political and economic life of the nation - there is the need to proceed cautiously and explore alternatives before taking the track to corporatisation. Experience - both domestic and international - with regard to corporatisation of public utilities has not been without its own failures. The Group of Experts would do well to take note of the lapses arising out of such exercises.

While declining Governmental support to the IR and clear indications that it would have to look for resources beyond the exchequer are the more immediate reasons for the need for overhaul, the Group of Experts has also rightly pointed out that the inability of the IR to respond to the changes in the economic scenario has been a cause for the several serious problems facing the organisation. Remedial action for the IR, therefore, should commence from within. One of the key issues that should be addressed even before heading towards corporatisation is to make a departure from the present vertically-integrated monolithic structure which has resulted in departmental biases and thereby neglect of customer services. Yet another decision that does not have to wait for full-fledged corporatisation is delinking services that are non-core in nature - manufacturing locomotives and coaches and maintaining passenger amenities are cases in point. As one of the three remaining state-run railways, including China and Russia, there is no gain made in neglecting the fact that the IR would have to gear up for corporatisation in the years ahead. Commencing a national debate on the basic issues confronting the Railways as suggested by Mr. Nitish Kumar in his Status Paper presented in 1998, though much-delayed, could be a good starting point for revitalising the Indian Railways.

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