Railways in India

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Facts:

    • Railway moves 23 mn people a day and has a poor safety record and is in desperate need of funds to modernise it.
    • The average speed is low: 54kmph – need is to improve the speed and s afety on existing routes and trains.
    • In China, the investment in railways is about Rs. 9 to 10 lakh crore whereas here it is Rs. 40,000 crore a year. As a result, rail traffic is going to the other sectors.
Rashtriya Rail Sanraksha Kosh
Rashtriya Rail Sanraksha Kosh to strengthen safety measures on the rail network to prevent accidents.
    • The Rashtriya Rail Sanraksha Kosh will be a non-lapsable fund which will be utilised for safety measures.
    • The fund will help Indian Railways to accomplish its zero-accident mission by strengthening the safety measures on the rail network in a comprehensive way.
    • Under this fund, envisaged works like track renewal and upgradation, bridge rehabilitation, elimination of level-crossings, construction of road over bridges/road under bridges will be under taken.
    • It will be also used for replacement and improvement of signalling system, improvement and upgradation of rolling stock, replacement of electrical assets and human resource development.
It is fact that the Indian railways and the organisation both are in crisis. Critically examine what needs to be done to improve railways finances, efficiency and profitability. (200 Words)
Indian Railways, a mammoth organisation – the lifeline of millions in India, is grossly inefficient and inadequate. It continues to show losses and represents a significant drag on the Indian economy. While, the sector has been opened up to 100% FDI, little has changed on ground. The following are some suggestions to improve the finances, efficiency and profitability of the Railways:
    1. Stoppage of cross subsidization of passenger fare by linking it to a inputs costs index
    2. Corporatisation of Indian Railways as said by Bibek Debroi committee. This would help maintain arm’s length between government and management besides de-bureaucratisation of the same.
    3. Railways move away from non-core activities like production and construction, leaving room for private entry. Separation of rail track from rolling stock with two independent organizations responsible for these.
    4. Tapping multilateral funding agencies, take out financing by long-term funds, a long-term bullet bond or a zero-coupon bond and joint ventures with state governments for suburban rail. Leveraging railways assets to raise funds such as monetization of land.
    5. e-samiksha – It is an online portal to monitor the implementation of budget proposals. It can help in timely completion of projects and prevent time and cost overruns.
    6. Temporarily stopping the annual dividend to be paid by the railways to the central govt
    7. Refunding the social service obligation expenditure incurred from low suburban fares and freight rates for some essential commodities and uneconomical branch lines.
    8. Enhance safety on recommendations of Kakodkar committee and better hygiene levels which can attract more people to travel in rail. This along with rationalisation of fares can improve revenue.
    9. Creating an IT infrastructure for handling the massive supply chain logistics besides developing of integrated cargo hubs and dry ports.
    10. Innovation council kayakalp to be set up (budget 2015) which can come up with cost saving innovations in railway functioning. E.g. – train top solar panels etc. install piezoelectric sheets on the railway stations, the footsteps of millions of people and those who come to pick up/drop those millions of people can add up to a big source of energy.
“Indian Railways plays a pivotal role in reviving economic growth in the country and investment in the railways has a large multiplier effect on the rest of the economy.” Examine how the 2015 railways budget seeks to achieve this goal. (200 Words)
Railways is the backbone for India economy but due to its neglect from last many years it couldn’t be utilized to drive the GDP of the country.
Now new government is looking to tap this potential of Indian railways and in the Rail budget they have announced lot of steps that will be taken to improve the Railways which will in turn effects the rest of the economy positively.
New budget has proposed an investment of more than 8.5 lakh crores in railways in next five years.
The main problem is from where this money will come, Railways have proposed some very good ways.
They are looking at passenger and freight increase, monetization of assets and borrowing, partnership with states, ministries of coal, iron ore, cement, fertilizers to co-develop projects, sovereign wealth funds and pension funds.
All this help in driving the economy in many ways:
    1. Capacity building on existing routes will help in carrying more and more freight, also in increasing passenger travelling.
    2. Operating ratio improvement will be focused which will help in better financing of projects in future.
    3. e-catering to select meals from an array of choices and On-board entertainment on select Shatabdi trains. These will help in generating jobs.
    4. Transport Logistics Corporation of India will be set up to provide end-to-end solutions at select railway terminals through PPP, and that the PPP cell in the railway ministry will be revamped to “make it result-oriented“. This will help in improving the management and improving the decision making process.
    5. Proposes to revamp policy and simplify processes for entrepreneurs through open bids, to be processed by independent experts and uploaded on the web. The new model concession agreement or standardized contractual frameworks, for instance. This will give entry to many new businesses.
    6. Partnership with states will help in improving the business in those states and will help generating jobs..
    7. Various ministries participating will help in again setting up new factories.
    8. Acquisition of locomotives, coaches, wagons, doubling of railway lines and their gauge conversion will give more money to railways and to easily transport commodities.
All this will also help in Make In India and will help in bringing in FDI. Overall if the plans are executed well then it will help in definite boost of Indian economy and generating lakh of jobs.
Recently a panel headed by Bibek Debroi submitted its recommendations on railway restructuring to the government. Analyse its recommendations and suggest what needs to be done to modernize and make Indian Railways efficient and profitable. (200 Words)
Railways can be the engine for high speed growth of the country. According to the Economic Survey, an increase in the output of the railways by Rs 1 will increase output of the economy by Rs 3.3 due to its forward and backward linkages. Thus, it is imperative that reforms in railways are fast tracked and it is modernized. In that respect, the recommendations of the Bibek Debroy committee merit a serious look.
The Debroy committee has based its recommendations on three pillars –
    1. Commercial Accounting – The panel favors a shift to a modern IFRS type commercial accounting which will provide better information about the cost benefit analysis of  different activities and thus help railways take sound operational decisions based on its merits.
    2. Changes in Human Resources – The Committee recognizes that the 16 zones of Railways have evolved in different ways and have different requirements. Thus it favors substantial decentralization of powers to DRMs and General Managers. It is also in favor of lateral entry for various specialists that the railways require.
    3. Gradual Liberalization – The committee is in favor of gradual entry of private operators in freight operations, but only after an independent regulator with statutory backing is appointed to ensure that the Ministry does not continue to do both the jobs of policy formulation as well as regulation.
    4. Restructuring – The committee favors a separation of the core functions of railways from its additional responsibilities like running schools, hospitals etc.
    5. Merging the Railway budget into the general budget after all such reforms are done in a time frame of 5 years.
In order to make the railways efficient, the following steps could be taken –
    1. A statutorily backed independent Railway Tariff Authority (RTA) should be established to ensure that setting fares becomes depoliticized.
    2. Railways must make more investments in track modernization and must decongest the popular routes.
    3. Small tweaks could ensure that the average speed of passenger trains could rise to 160-200 kmph. This could be an interim measure before more modern ‘bullet trains’ are inducted.
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Ensure last mile connectivity to pitheads
Multi-nodal transport focus
DFC, Diamond quadrilateral, Bullet Trains etc.

 

 

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