A Panel on Railway Restructuring, headed by Bibek Debroy, member of the NITI Ayog, which presented its final report to the Government in the Ministry of Railways on June 12, 2015, has recommended far reaching measures to change both the form and content of Indian Railways. If implemented together with 100 per cent foreign direct investment (FDI) already allowed by Narendre Modi led Union Government, Indian Railways are in for fragmenting its present integrated unitary character under a single management, putting at risks the time tested integrated coordinated mechanism of command and control in the Ministry of Railways. Recommendations also risk increased frequencies of accidents and jeopardize standards of railways safety and security of services. Besides, the Panel seeks to disturb the existing balance between the railways social responsibility and its commercial character. And mind you, that also in our system of rule of law based democratic governance, where people are the sovereign masters, who elect the Government. And bulk of our people is poor.
This Report is in the saga of various such major Committees on railways reforms beginning with Sarin Committee, Prakash Tandon Committee, Justice H.R.Khanna Commission on Railways Safety, Rakesh Mohan Committee, Sam Pitroda Committee, Anil Kakodkar Committee, and Railways Corporate Safety Plan together with countless splinter groups and committee reports. All such reports have come a cropper with lukewarm or nil participation of private sector in the railways with faster rusting, corrosion and depreciation costs. Operations, maintenance, manufacturing of railway rolling stocks and components are certainly not the cup of tea for private sector in Indian context, given long gestation period, little or no profitability in production, running and operations of railways.
Since the opening of Indian economy in July 1991 to the global market economy, the successive Governments have tried all the tricks in its armoury to infuse private participation in Indian Railways that, except in container traffic, have come to naught, notwithstanding the present Government’s strident postures. Even States are unable to participate in developing rail infrastructure on cost sharing basis in their areas because of acute financial crunch.
Bibek Debroy Panel has recommended entry of private players in passenger and freight services, scrapping a separate rail budget, switching over to commercial accounting of railways functions, cprporatisation of railway production units by opening them to competition, involving private sector in manufacturing coaches, wagons and locomotives, separation of unremunerative activities like running schools, hospitals, stadia, catering, real estate development, security set up of Railway Protection Force (RPF), from the core functions of railways. Other important recommendations include dismantling overly centralized and hierarchical centralized orgnisation, recasting staffing with entry of outside talent and restructuring its business units to usher in efficiency, which is not ab initio but ab hinc with a provision of an independent regulator with quazi-judicial statutory authority. It also recommends decentralization of decision making at zonal and divisional railway levels, besides putting railway construction units under one umbrella of special purpose vehicle or under one of the two PSUs of railways, IRCON and RVNL and all the production units under a single company to be named Indian Railway Manufacturing Corporation.
The Report can be summerised on five points of accounting reforms, unified entry, independent regulator, private entry and decentralization. A time line of five years and beyond has been suggested for implementation.
Under the prevailing situation, the way forward for Indian Railways is to implement the recommendations of PrakashTandon Committee Report for a unified entry through combined civil services examination under the umbrella of Indian Railways Management Service with proportionate percentage representation of all the existing services (disciplines) to ensure a better command and control mechanism of an integrated management of a unified cadre for still better well integrated coordinated system to improve productivity and safety of the system. Mr.Tandon was a managerial wizard, widely credited for having turned around then ailing Hindustan Uniliver Ltd, and public sector Punjab National Bank. This alone would go a long way in revamping the business module of railways in tune with the globalised economy. It would take care of all other things recommended by Debroy Committee and all other Committees preceding that.
The other solution to stem the rot, is to give top priority to expeditious completion of the Dedicated Freight Corridors on Delhi-Mumbai and Delhi-Kolkata corridors without any further cost-push and time over run, scraping unviable high speed bullet train on Mumbai-Ahmadabad route as elitist and, giving priority to semi-high speed and high speed corridors, upgrading all round railway technology, tracks, completing gauge conversions, prioritizing completion of pending rail projects, expanding rail infrastructure etc.
The measures suggested by Debroy Committee, if implemented, will increase all round cost of rail services to the nation including cost of labor force, their employment across the country, reduce employment in railways with growing modernization, bring Indian Railways under debt trap with an attendant rider that the country may end up with a high cost economy on account of railways. Scrapping of railway budget will deprive the railwys of focused attention for its maintenance and development by rendering it 100 per cent dependent on the Finance Ministry. The Report is camouflaged privatization of Indian Railways despite the Panel’s disclaimer!