Modernisation Vs. Investment: How Centre plans to steer Railways back on track

The present government has been just over a year in power. It came in with grand plans of revolution. Its problem was that a decade had passed since the BJP was in power and virtually no one who had served in the last BJP government was fit to do so again. The Cabinet was full of novices, and looked in every direction for ideas. The prime minister chose Sadananda Gowda as minister of railways. He was asked to work out a plan for reforming the railways. He looked around, saw Bibek Debroy with little work in NITI (National Institution for Transforming India) Aayog, and appointed a committee with him as Chairman. But soon, the PM felt he needed someone more energetic for a ministry that called for action, sent Gowda to law ministry, and brought in Suresh Prabhu in November.

A New Platform

Prabhu met his railwaymen and found they were none too happy with the Debroy committee. It looked like a parking lot for retired elders. Only one member had any experience of the railways. He heard that the Debroy committee was contemptuous of the railways’ antiquated accounts.

So he roped in Vinod Rai, once comptroller and auditor general, as adviser. He shared the railwaymen’s contempt for economists, and shared their view that the railways would have been the world’s envy if the coin counters in North Block had given them money to invest and innovate. So he called up Ratan Tata and made him head of a new innovation council, calling it Kaya Kalp, a name he may have got out of a novel of Marathi writer Shubhada Gogate. He collected ideas from his railwaymen about what needed to be done, put them in a white paper, and released it when he presented the Budget. He recognised that the railways needed investment, which required time to make and to yield fruit. So he promised that by the end of this year, he would come up with a vision document. Debroy may have been disappointed by the sullen faces in the Railway Board, but he did not let himself be discouraged. He submitted a copious interim report in March with a strong message, and a final report with few changes in June. Mystified by the railways’ antiquated system of accounting, the report asked that they should change over to modern, double-entry book-keeping.

Economists think instinctively of competition and privatisation as incentives to efficiency. The Debroy committee recommended divestment of non-core services, such as catering and hospitals run by the railways, to private providers. The Indian Railways (IR) itself is a natural monopoly, and it is impossible to introduce competition (save in the form of road transport). So, the committee recommended a strong, independent regulator of price and service quality, and separation of track and trains so that private competition can be introduced in the latter. As that separation implies, the committee recommended the running of railways to be separated from investment and manufacturing. The railways have created ever more zones and divisions over time to increase the number of senior jobs available on promotion. The committee recommended a decrease in the number. But it wanted decentralisation of powers from New Delhi to the zones. The railwaymen were dismayed by these blithe plans for their dismemberment. The All India Railwaymen’s Federation has decided to observe a Black Day on June 30 in protest against the Debroy report.

Right Signal for Employees

It is Prabhu who lords over the railways, and not Debroy. He will read the Debroy committee’s report carefully, but will follow the inclinations of his railwaymen, which are reflected in the February white paper, “Due to underinvestment, there has been severe congestion on the network and has resulted in the inability of the system to accommodate more trains and increase the speed of trains. “Therefore, the need of the hour is to undertake a massive infrastructure expansion and decongestion programme coupled with upgradation of technology and judicious electrification of tracks along with enhancement of terminal capacity. It is evident that the real issue today is the lack of physical capacity over IR on key routes due to severe congestion and the incremental traffic is being offered on the saturated routes only.”In other words, IR rejects the Debroy committee’s proposals for reorganisation. It thinks it has as good managers as any. Their shortcomings are entirely due to the fact that they were never given enough money to invest and to improve the system. Just give them the money and they’ll deliver. We, spectators, can take any view we like on the two approaches. It is irrelevant. The railways cannot stop. And they can be kept running only by the existing workforce, whatever we think of them. The government will never have the courage to dismantle the railway management, as the Debroy committee wants. It’ll have to make do with the current management, and make only those improvements that it agrees to — and the government gives it money for. Modernisation of railway accounts is a good idea. But for the rest, let us wait for the Ratan Tata committee’s views — and for the money Arun Jaitley may cough up for the railways. (Courtesy: By Ashok V Desai)