Modernisation of Indian Railways

IN NEWS:

• A number of Vande Bharat Expresses are being flagged off across India.

STATISTICS:

• India has the fourth largest railway network with over 22,593 operating trains with a daily passenger count of 24 million passengers and 203.88 million tonnes of freight.
• Indian Railways has registered a record revenue of ? 2.40 lakh crore in the 2022-23 financial year, up by nearly ? 49,000 crore from the previous year.
• Also, Indian Railways' passenger revenue has registered an all-time high growth of 61 per cent to reach ? 63,300 crore in 2022-23.
• India is projected to account for 40% of the total global share of rail activity by 2050.

ISSUES WITH INDIAN RAILWAYS:

I. SERVICE DELIVERY:

• Safety:
  • Over the years, India has witnessed a series of rail accidents. The Bikaner-Guwahati Express train accident at West Bengal in 2022, Seemanchal express accident in 2019 and Hirakhand Express accident in 2017 are some of the examples.
• Quality:
  • Indian Railways is riddled with issues of poor quality in services delivered. Various CAG reports have rapped the Railways about the poor quality of meals served on board and management of linen used in the trains.

II. ADMINISTRATION:

• Monopoly:
  • The government is the sole player in the rail transportation system in India. Thus, the lack of any competition has created poor quality service delivery and inefficient management of the system.
• Centralised:
  • Currently, the Railway Board has the powers of policy making, operations, and regulation, while zones have very limited powers with regard to raising their own revenue.  Therefore, they are unable to contribute more effectively towards improving Railways’ revenue. 
• Non-core functions:
  • Apart from its core function of running trains, Railways is also engaged in several un-remunerative peripheral activities such as running schools, and hospitals, staff housing, catering, and security. This imposes a huge financial burden on Railways.
• Recruitment:
  • Railways did away with the decades old system of recruiting officers to the eight ‘Group A’ services and instead have recruitments to a single service called the Indian Railways Management Service (IRMS). However, there is a nearly 40% reduction in the cadre strength.
  • Also, the recruitment would be made through the Civil Services exam, which does not measure the technical competence which is needed in Railways.
• Political involvement:
  • Indian Railways has often been used as a tool for political patronage, especially during poll years. Due to this, several economically inefficient initiatives and projects were established in the past.
• Dilemma of identity:
  • The Indian Railways suffers from a dilemma of identity: is it a commercial entity or a government department trying to work on commercial principles?

III. FINANCIAL:

•  Cross subsidy: 
  • Railway is cheaper compared to road routes in India (at the rate of Rs. 2/ton-km for freight and Rs. 1.6/passenger-Km). However, cross subsidy has become counterproductive by driving away freight business, thereby affecting the internal revenue generation of the Railways.
• Operating inefficiency: 
  • The Indian Railways has an operating ratio of 98.44%, which indicates its dire state. As much as 60% of Indian Railways lines are utilised beyond its 100% capacity. Large number of delayed and stranded projects adds to this stress.
• High revenue expenditure:
  • Railway is the only “earning” department/Ministry of the Government that fully meets the salary, and (till recently) the pension obligations out of its own earnings. The Eighth Pay Commission, normally due by around 2025-26, is bound to strain finances further.
• Heavy reliance on budgetary support:
  • In the last few years, the growth of Railways’ transportation business has been declining, and consequently, its ability to generate its own revenue has been on a decline. Hence, Railways’ dependence on budgetary support for capital expenditure has been on the rise.
• Self-sufficiency vs social obligation:
  • Indian Railways is caught up between making it a self-sufficient organisation and serving its social obligation as a poor man’s mode of transport. It is unable to raise passenger fares to viable levels, while being forced to run new trains and routes along commercially unviable routes.

IV. EXTERNAL:

• Competition from other modes:
  • The cost of a flight ticket between major cities has become nearly equal to that of a second-class AC train ticket. Also, timeliness and better service delivery makes people prefer flights over trains for longer journeys. 
  • The share of roads in freight transport is more than half in India. As more highways are getting built rapidly, the competition from roads in freight transport is increasing at an accelerating rate.
• Impact of emphasis on sustainable development:
  • The push for renewable is bound to have an impact on India’s coal Industries. The Railways is particularly vulnerable because around half of the freight traffic comes from carrying coal.

INITIATIVES FOR THE MODERNIZATION OF RAILWAYS:

• High Speed Rail Corridors:
  • The Mumbai-Ahmedabad High Speed Rail is the sanctioned High Speed Rail project in the country and is being executed with technical and financial assistance from the Government of Japan.
• Induction of semi-high speed Vande Bharat trains:
  • The government intends to introduce 400 Vande Bharat trains during the next five years.
• Introduction of Tejas Rajdhani trains:
  • Ultra-modern Tejas trains have been introduced on LHB platform with sleeper coaches.
• LHB coaches
  • Indian Railways has decided for large scale proliferation of Linke Hofmann Busch (LHB) coaches which are technologically superior.

• 'KAVACH' System:
  • Indian Railways (IR) has indigenously developed an automatic train protection system rechristened as ‘Kavach’ (Train Collision Avoidance System).
• Automatic Signaling (ABS)
  • In order to increase line capacity to run more trains on existing High Density Routes , IR introduced Automatic Block Signaling.
• Theme Based ‘Bharat Gaurav ‘ Tourist Circuit Trains:
  • IR launched a theme based tourist circuit train -‘Bharat Gaurav’ to showcase India’s rich cultural heritage and magnificent historical places.
• Station Redevelopment:
  • IR has made station development as the main focus area to enhance customer satisfaction. The facilities envisaged at redeveloped stations will include provision of spacious Roof Plaza, food court, waiting lounge, children play area, designated space for local products, etc. The

WAY FORWARD:

In 2015, the Indian Railways had set up the Bibek Debroy Committee on Restructuring of Indian Railways. The committee had made some key recommendations, which include:

• Split the three roles of Railways:
  • Policy making, to be kept within government control.
  • Regulation, to be entrusted with an independent body to ensure a fair playing ground for all entities.
  • Operations: The core functions can be privatized or corporatized, while peripheral function must be privatized.
• Encourage Private entry: in running both freight and passenger trains in competition with Indian railways
• Railway Regulatory Authority of India (RRAI): Establishment of an independent regulator to ensure fair and open access, establish tariffs and adjudicate disputes.
• Establish Indian Railway Manufacturing Company to manage all the production units.
• Focus on core activities: Indian Railways should focus on core activities & distance itself from non-core.
• Investment Advisory Committee: consisting of experts, investment bankers and representatives of SEBI, RBI, IDFC and other institutions to recommend raising new resources.
• Refinements in the way Indian Railways prepares and maintains accounts, costs, activities and services, recruitment & HR processes
• Decentralisation of Railways.

            Besides these, the Committee for rationalisation of government bodies and proposal for the Ministry of Railways has called for major reforms in the Indian railways such as closure of major establishments, merger of decades-old organisations and private participation in running of its schools and hospitals

PRACTICE QUESTION:

Q. Indian Railways need a major overhaul if it is to maintain its significance in the coming decades. In this regard, discuss the issues faced by railways and suggest solutions?