If India is to entertain the slightest hope of creating 10 million new jobs annually, our growth rate has to be brought back to at least 8 per cent or more. An 8 per cent economic growth rate implies a yearly transport capacity expansion of about 10 per cent, which roughly converts into a fourfold capacity increase over the present haulage by 2030. What does this denote for the Indian Railways (IR)?
Essentially, for minimising the impact on the environment because of increase in traffic, by 2030, IR will have to carry about 50 per cent of the land traffic against the 36 per cent they move today. This calls for a five to sixfold capacity expansion over the current levels, or a yearly increase of nearly 15 per cent.
Looking at the current situation, it is difficult to understand how existing bureaucratic institutional arrangements, the political class’s understanding of the railways and the current levels of investment and inefficiencies can bring this about. The result is that IR has been constantly growing below the increase in demand for movement (during 2003-10 it grew by 10 per cent). Presently, it is struggling to go beyond 7 per cent.
This challenge can only be met by increasing the capacity of the existing network to run more passenger and freight trains, and at the same time, set in motion processes for rebuilding IR into a 21st century railway. How successful the railway board will be in making this happen will be determined by the political executive’s inclination towards setting clear strategic objectives and providing the means to achieve them.
For rebuilding the railways, the political class will need to take challenging decisions and commit a substantial percentage of India’s GDP to the project over the next decade or more. In the 19th century, the single-largest investment in colonial India was railway construction. It transformed the country.
But questions as to whether the investment was in India’s best interests and if it would not have been better to build a smaller network and use the money for other social infrastructure, were hotly debated by national leaders. A comparable debate is required if we are to rebuild the railways for a 21st century India. I point this out to emphasise that railway investment is never a simple case of financial returns, but invariably gets entangled in the politically sensitive question of “who benefits and who pays”.
Unfortunately, India lacks forums where such questions can be discussed in a non-partisan manner. Thus, it will be difficult for the government to bring into decision-making strategic thinking that incorporates political and social contexts from across the political spectrum. Moreover, such thought groups are critical for helping decision-makers …continued »