Railway Reforms

Indian Railways (IR) has the 4th longest rail network in the world. It is a network of 70,000 km and runs about 21,000 trains, carrying 23 million passengers and 3 million tonnes of freight per day. The government has set a vision of making railways a 100% safe, fast and reliable mode of transport for passengers and freight.

Need and significance of the railway reforms:

  • Economic development:
    • Reforms are needed in Railways to ensure that it meets the requirements of a soon-to-be $5 trillion economy.
    • To contribute comprehensively in Indian development IR needs administrative reforms, to improve services and efficiency and engineering reforms, to improve cost and environmental effectiveness.
  • Departmentalism:
    • The Railway Board is Indian Railways’ apex decision-making body. It is organised into various departments like mechanical, electrical, traffic and finance that are vertically separated from the top to bottom.
    • These lines of separation made IR a complex over-departmentalised organisation with inefficient decision-making. Recent reforms of IR restructuring involving unification of existing Group A services into an Indian Railway Management Service (IRMS) and reorganisation of the Railway Board is a right step.
  • Administrative Reforms
    •  The management organization needs to be radically simplified. The Debroy committee’s recommendation to separate the core functions (rail operations) of IR from the non-core (medical, schools, protection force, etc.) makes eminent sense.
    • The Debroy committee also recommends a revised governance structure that is empowered to make decisions and create some distance from the government.
  • Modernisation
    • Indian Railways has not been able to keep pace with the modernisation of infrastructure and services and has not been able to expand at the pace that India needs.
    • Almost all arms of the railways require modernisation of equipment, processes and training, all of which are still continuing as they have been, through the decades. The result is that the railways continue to be a drain on the exchequer while continuing to provide vital services inefficiently.
  • Safety:
    • In India rail accidents are high. According to data from National Crime REcord Bureau (NCRB) Railways records 38 per cent rise in accidents in 2021
    • The Kakodkar committee had suggested investing Rs 1 lakh crore over a 5-year period and creating a statutory railway safety authority.

Bibek Debroy Committee for Restructuring of Railways

  • Independent Regulator
    • Railways Regulatory Authority
    • The regulator will be a statutory body, with an independent budget and independent of the Ministry. While it will not determine tariff, it will monitor whether the tariff is market determined and competitive
  • Privatisation
    • No privatization of Indian Railway but allowed participation of private sector in railway projects
  • Focus on core activities
    • apart from its core function of running trains, Railways also engages in peripheral activities such as running schools, hospitals and a police force
    • Railways will face increasing competition in the future. To enable themselves to compete effectively, they will need to reduce costs on these non-core activities
    • Non-core activities can be outsourced to private entities.
  • Accounting Reforms:
    • The process of accounting in Indian Railways is “very complicated”. It is impossible to figure out what the rate of return on a project is
    • The financial statements of Indian Railways need to be re-drawn, consistent with principles and norms nationally and internationally accepted.
  • Financing Issue
    • Financing of Railways is a challenge because:
      • (i) investment is made in projects that do not have traffic and hence do not generate revenue
      •  (ii) the unbalanced mix of passenger and freight traffic does not help generate revenue
      •  (iii) the efficiency improvements do not result in increasing revenue,
      • (iv) delays in projects results in cost escalation, which makes it difficult to recover costs.
    • Improve internal resource generation of railways
  • Streamline recruitment & HR processes
    • Remove the multiplicity of channels of recruitment and consolidate the process. At present, there are 8 organized Group ‘A’ services in Indian Railways. Deployment to these services is by direct recruitment from UPSC (Civil Service and the Engineering examinations) and also by promotion of Group ‘B’ officers of the department.
    • The eight services can be broadly categorized into two bigger groupings viz. technical and non-technical services.

Read: Why Indian Railways fail to attract Private Investments?

Steps taken by Government

  • Dedicated Freight Corridors (DFCs):
    • The DFCs are being created with the motive of improving the share of freight traffic. They were supposed to be operational by 2022.However, now they are expected to be completed by 2023-24.
    • DFCs include:
      • The Western Dedicated Freight Corridor (WDFC), from Uttar Pradesh to Mumbai;
      • The Eastern Dedicated Freight Corridor (EDFC), Ludhiana in Punjab to Dankuni in West Bengal.
    • The World Bank has funded INR 124.53 billion for the Eastern DFC, while the Japan International Cooperation Agency has provided INR 387.22 billion for the Western DFC.

DFCs Raliway Connectivity UPSC

  • PM Gati Shakti
    • It is a transformative approach driven by seven engines, namely, Roads, Railways, Ports, Airports, Waterways, Mass Transport and Logistics Infrastructure to spur economic growth and sustainable development.
    • It will help in developing world-class modern infrastructure and logistics which will bring synergy by providing multi-modal integrated and seamless connectivity for movement of people, goods and services.
  • Atma Nirbhar Bharat Initiative:
    • After this, more than 97% of the equipment required for the production of electric locomotives is being sourced domestically.
    • The Indian Railway has also started manufacturing smart coaches, which provide additional features like announcements, information on trains approaching different stations and air-conditioning and temperature control, etc.
  • Kisan Rail: The commencement of ‘Kisan Rail’ is another important initiative to improve the freight business in general and provide a push to farmers in particular. Under this scheme, 157 trains are being operated on eight routes transporting more than 49,000 tonnes of commodities.
  • Green Fuel Initiatives:
    • Indian Railways is aiming to achieve 100 percent electrification of railway lines by December 2023.
    •  It eliminates the requirement for separate power cars in trains, thus cutting down energy costs significantly.
  • Station Infrastructure Redevelopment Programme:
    • The Government of India has launched the station redevelopment programme, which aims to redevelop 400 railway stations across India for INR 1,000 billion under a public-private partnership (PPP) model.
    • The programme will try to develop self-sustainable railway stations with high standards of safety, comfort, user-friendly passenger amenities, value-added services and efficiency by adopting the best technological practices.
  • Digitisation Initiative
    • As of July, 2021, the Wi-Fi facility has been provided at 6,045 railway stations. Other digital initiatives include the installation of internet-based video surveillance systems and IP-based CCTV surveillance cameras.
  • Connecting the North-East and Mining Districts
    • The railway connectivity is being enhanced in the North-east as part of inclusive development. The entire rail network of the North-East (NE) is being connected to broad gauge. Major cities in all NE States are being connected by Rail.
    • The Railways has also launched ‘Mission Hungry for Cargo‘ initiative that is targeting a 45% modal share in freight transport from current 27%. The Railways is also mapping mining districts of the country to enhance their railway connectivity.

Avataran: The Seven Missions of Indian Railways

  1. Mission 25 Tonne: It aims to increase revenue of Railways by augmenting the carrying capacity. To achieve this, 10-20% freight loading will be done through 25-tonne axle-load wagons in 2016-17 and target movement of 70% of freight traffic on high axle load wagons by FY 2019-20.
  2. Mission Zero Accident: The mission comprises two sub-missions.
    • Elimination of unmanned level crossings: The target is the elimination of all unmanned level crossings on Broad Gauge in the next 3-4 years. This will reduce deaths due to accidents and will improve the throughput of the network.
    • TCAS (Train Collision Avoidance System): A new technology has been developed to equip 100% of the High-Density Network with TCAS in the next 3 years. It will prevent head-on collisions and also improve throughput with increasing average sectional speeds.
  3. Mission PACE (Procurement and Consumption Efficiency): Mission PACE is aimed at improving procurement and consumption practices to improve the quality of goods and services.Several optimum usage practices such as Vendor Managed Inventory, direct procurement of HSD, new procedures for identification and disposal of scrap, etc. will be adopted.
  4. Mission Raftaar: Mission Raftaar aims at doubling of average speeds of freight trains as well as increasing the average speed of superfast mail/express trains by 25 kmph in the next 5 years.
  5. Mission Hundred:  Under Mission 100, at least a hundred sidings {siding refer to low-speed track section / track branch distinct from a running line} will be commissioned in the next 2 years. The current siding policy would be revised to elicit greater private participation.
  6. Mission beyond bookkeeping: By establishing an accounting system, outcomes will be tracked to inputs. Right accounting would determine the right costing and hence the right pricing.
  7. Mission Capacity Utilisation: Under the mission, a blueprint is prepared for making full use of additional capacity created through two Dedicated Freight Corridors between Delhi-Mumbai and Delhi-Kolkata which are scheduled to be commissioned by 2019.

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What should be the approach going ahead?

First, there is a need to implement the recommendations of the Bibek Debroy committee, such as the expansion of Indian Railways manufacturing company, Corporatization of core functions of railways, etc.

Second, the focus should be on increasing the revenues, particularly the freight revenue. In this context, the operationalization of two DFCs should be expedited.

Third, an annual report called the ‘Indian Railways Report’ along the lines of the annual Economic Survey should be placed in Parliament every year. It should detail the physical and financial performance of the Railways. It will make railways more accountable and transparent.

Fourth, establish a regulator and moderate charges like the amount for the maintenance of tracks and stations. This will help in attracting more investment in railways.

Fifth, As a part of ‘Atma Nirbhar Bharat‘, 2,000 km of the rail network will be brought under ‘Kavach‘, which is an indigenously developed anti-collision system with world-class technology to prevent accidents. Kavach will help railways to achieve its goal of zero accidents. In the next 3 years, Indian Railways is slated to introduce 400 new-generation and high energy efficient ‘Vande Bharat‘ high-speed trains with focus to add value to the passenger riding experience. The focus should be fast execution of these initiatives.



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