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Fast - track railways to prosperity...

For long, we have been pointing to the poorrecord of the Indian Railways: like the paltry additions of rail lines, averaging just 160 km per annum, since independence. China in recent years has been adding more than 15,000 km modernising the entire rail system and introducing trains with speeds in excess of 300 kmph.

In India, the high operating ratio at 92 per cent leaves little resources for improving the services or the safety of the railways. The massive loans raised leave little scope for raising more funds for new lines. A humongous workforce of 13 lakh plus along with the burden of pensions for retired employees demand increasingly larger amounts to meet the employee costs. The cost of the large number of passengers handled is subsidised by freight earnings. The rigidities of the socialist overhang and an extremely unionised approach have also been problem areas.

The system has also been losing custom to the more efficient and aggressive road transport. The over-centralised bureaucratic set up is another albatross hanging round the neck of the railway system. The ministry, left to a junior partner of the coalition governments over the last couple of decades, is another handicap.

The appointment of Suresh Prabhu gave hope for change. In his first railway budget, he took bold not to announce new trains or new projects and opted to consolidate and complete works in progress.

The final report of the Bibek Debroy committee continues with the Modi-Prabhu promise of liberating the railways from decades of stagnation and poor performance. The recommendations are bold and refreshing, stressing on the switch over to commercial accounting, decentralising administration and setting up an independent regulator.

The report also indicates phasing out the railway budget and the railway board over the next five years.  In short, these will help end the socialist creed of running the railways as a service and treat it as a commercial organisation. The opening up of the railways suggests the entry of private operators to run services making use of the rail lines and other infrastructure as also harnessing the enormous real estate value available in metro stations. The independent regulator statutorily constituted would also take care of equitable practices.

In a recent television debate C A Raja Sridhar, National President, Hind Mazdoor Sabha and Vice President, All India Railway Men’s Federation, predictably argued the railways as a service and warned of the danger of it deteriorating with the onset of competition as had happened with Air India and BSNL. Sadly, he forgot the benefits brought about by such competition. Take telecom services: from just around 40 million connections in 2000, it has expanded 24 times to around 960 million today making communication affordable and productive for the vast majority of people. Life without a cell phone is unthinkable today. Competition has also helped expand massively air passenger services. Look at the number of aircraft in operation: compared to the 70 owned by Indian Airlines and Air India, today we have over 400 and all the airlines have ambitious plans to acquire a large number of aircraft.

IE suggested to successive railway ministers the scope for levying a cess on freight and on passenger tickets for construction of new rail lines. The latter is of great importance. Most of the rail lines are saturated with little scope for increasing the number of trains or their speed. We have the anachronism of the Chennai-Mumbai Mail taking over 28 hours with an average of around 45 kmph or the Shatabdi Express between Chennai and Bengaluru taking over five hours to cover 200 miles at an average speed of around 60 kmph.

The ingenuous method of fleecing passengers through hefty tatkal fares on overcrowded routes is another injustice perpetrated on the hapless passengers. The Debroy report suggests railways doing away with running schools, police forces, colleges and hospitals and dozens of other services which  only serve its bloated workforce. There is a lot of validity in running the railways as a commercial organisation, cutting out the flab, decentralising it and providing for unremunerative lines or other social objectives out of the budget. An independent regulator, like the IRDA or CERC/ SERCs or TRAI would also help the public and the stakeholders to get fair and equitable treatment.

Of course, the unions are bound to oppose. But the government has to put its foot down, lest we miss a golden opportunity to rail the railways on a fast track of growth and prosperity.


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