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.
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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 contend with forces shaping the future of the railways. Hopefully, the railway minister will consider establishing such forums in the coming budget.
Let us look at the question of restructuring, so essential for enhancing productivity of the existing system. An example will suffice. On all high-density routes, IR has installed automatic colour light signalling. Chinese railways are able to utilise such a system to the extent of 120 trains in 24 hours. IR can manage 70-80 with difficulty.
There are three reasons for this. First, unlike IR, the Chinese rarely have speed restrictions, which are imposed by track engineers to slow down trains when track conditions deteriorate. Second, locomotives, wagons, coaches and signalling systems are extremely reliable; in contrast, failures are common within IR. Third, the operating culture is highly disciplined.
It collects all freight trains in a holding yard and moves them in a convoy, over a three-hour band, by ensuring that drivers are in the cab and push off the moment signals turn green. The rest of the time is available for passenger movement.
What prevents IR from doing the same? The answer lies in the manner IR is organised. IR, unlike a composite organisation, is split into departments that operate by department-centred doctrines. Individuals, therefore, commit themselves to the task set by the department and not the total outcome.
The departmental split influences all decision-making and leads to a lack of clear overall strategic direction and weak planning. The result is that IR finds it difficult to address the contested demands and competing interests of the various services that constitute railway management.
An obvious example is the split in locomotive management between the mechanical and electrical departments that has prevented the development of an optimum traction policy. The answer lies in correcting the severe departmental balkanisation, which has occurred over the years, especially in investment decision-making.
As a first step, the railway board structure needs to be reformed, by detaching operational responsibility and technical management of functional departments from board members and placing them under directors general. This will enable board members to free themselves from departmental compulsions, view IR as a whole, and restore the board’s true function — defining long-range objectives, measuring performance and taking investment decisions free of departmental biases.
A few inappropriate fiscal and administrative policies of the colonial state need revisiting because many of IR’s present financial problems arise from their continuation. IR’s capacity-expansion has suffered because the state seeks its share of railway revenues for budgetary support and then constricts development by providing inadequate funds for investment.
Moreover, IR is expected to give priority to the payment of dividend liabilities and yet keep to the orthodoxy of a balanced budget, even if revenues are inadequate. This invariably leads to a lowering of the appropriations for maintenance, precipitating questions of safety. Such administrative and financial procedures continue as in the past and reinforce underdevelopment. Hopefully, today’s railway budget will address some of these infirmities.
The writer is former general manager, Indian Railways, and former member, Central Administrative Tribunal