Bring Railways back on track

It should be restructured and run as a corporate entity rather than the fiefdom of politicians.

The Railgate episode has been a painful sight for millions of countrymen, and for the large body of railwaymen in particular. However, this is also an opportune moment to re-jig the IR monolith.

Once the bulwark of India’s transport sector, it has steadily forfeited its pre-eminence in the country’s transport business. IR, therefore, needs to rediscover itself as a vibrant lifeline for the country’s economy. Though there cannot be a foolproof method to prevent scams, , some steps can be taken to infuse resilience and strength in the set-up. These measures can be outlined.


First, IR must unambiguously commit to essentially being a corporate entity, rather than cast itself in the somewhat ambivalent role of being a departmental undertaking with public service obligation. It should bear the responsibility to carry the nation’s freight and passengers efficiently and economically. It must drastically cut a whole range of freebies and concessions, irrational subsidies, continuing only those giveaways that fall in the genuine ambit of corporate social responsibility.

Today, IR carries just 30 per cent of the country’s freight and 10 per cent of passenger traffic. It has been unable to benefit from the overall increase in passengers and freight. IR has been steadily losing its business share because it has failed to build matching capacity.

Its primary obligation has to be towards capacity enhancement; it can ill-afford to revel in the luxury of remote area connectivity projects through unviable rail lines.

Second, IR needs to be freed from the whims and caprices of policymakers, or rather, unbridled satraps who have viewed the Railways mainly as a fiefdom for their sectarian objectives. A separate budget for the Railways, now an irrelevance, provides a facile platform to the Railway Minister for winning plaudits by playing to the populist gallery. It has done immense damage and must be dispensed with. IR will instead be served well by an independent regulator for defining and safeguarding its commercial interests. Likewise, an advisory council with representation from among business leaders, reputed academicians and professionals, if put in place for effective interaction and advice on investment and business plans, can be of great help.


Third, as reforming IR will require large-scale financial restructuring, it will also involve the shedding or even ring-fencing, of its non-core assets, activities, and businesses. There is little justification for IR to commit its scarce resources to in-house manufactures of much of its rolling stock and other equipment requirements. Its management structure and organisation, that has endured over 150 years, served well in the wake of the first industrial revolution. Now, amidst the third such revolution, the structure is outdated. The information-based organisation needs far fewer levels of management than the command-and-control model.

A plan to rationalise and reorganise the apex level managerial cadres, to trim the tiers that only retard and slow down decision-making and blur responsibility, is a clear need. Large station complexes, major freight depots and centres, maintenance depots and installations may all be endowed with local area managers with delegated authority over all functionaries and disciplines.

In March 2005, China streamlined the traditional 4-tiered “railway department, railway office, railway branch, railway station” into a 3-tiered “railway department, railway office, railway station” system. Why shouldn’t IR follow suit?


It’s the Railway Board that must lead the initiative. Too many routine and mundane functions are being taken up by the Board/Ministry, with over a hundred Joint Secretary-and-above level incumbents in Rail Bhawan.

It needs to ruthlessly prune the number of officers and staff to at least less than half. Again, over the years, the system has been subject to the wrong kind of tinkering, only enabling the senior bureaucracy to swell their ranks and enhance their avenues for promotions. Fourth, the Board is anything but a well-knit, cohesive corporate group.

The different departments of the organisation pursue conflicting goals to the detriment of organisational effectiveness. Operational silos have sapped the energy and vitality of the system.

Like in the armed forces, top general administration posts must perforce be manned only by those who are exposed to the rigours of operations in the field and interactions with customers. There may be a rigorous selection process for officers from different disciplines to be in the general administration pool.

For objectivity, fair-play, and transparency, a standing selection panel will need to be appointed with an acknowledged HRD expert, a representative from business/industry, one from academia, besides a senior railway officer.

Fifth, the organisation of the Railway Board needs to be overhaul. This is to effect a functional segregation of its passenger and freight businesses.

The Board should be altered from a departmental, as at present, to a functional composition, say, a Member each for (i) freight services, (ii) passenger services, (iii) infrastructure (track, signalling, electrification, buildings), (iv) rolling stock and equipment, (v) HRD, including industrial relations, vigilance, and safety, (vi) finance, including accounts and material management, besides (vii) Chairman as the CEO with responsibility for overall coordination and control, along with planning, R&D, and external relations.

Today, confronted with onerous challenges, IR can do well to experiment with a chief executive being drawn from among proven national or international business experts.

(The author is former CMD, CONCOR.)