Railways needs over $100 bn for revamp

Rail Minister Suresh Prabhu has started financial restructuring of railways ahead of budget without waiting for the report of High Level Committee headed by Bibek Debroy.

The reason seems to be simple that the body has the mandate for one year and the minister does not intend to wait for that much time.

Prabhu gave an outline of financial plans in India Economic Plans. He said that low operating ratio of railway does not allow investment in railways. For this, he said, railway needs $100 billion from different sources including FDI.

Soon after he took over, Prabhu formed the Shreedharan Committee to formulate procedures of devolving power of commercial decisions to General Managers or officers of similar ranks. The Committee has submitted its report. It is to have recommended maximum use of technology to ensure transparency.

The Shreedharan Committee, in a way, also partly dealt with the task of restructuring Railway Board, the task which was given to Debroy Committee. Debroy has to suggest ways to convert the Board, basically, into a policy making body. Divesting commercial decisions including tender processing is one of the important steps towards it.

The new high level committee formed under senior bureaucrat and retired secretary of government of India D K Mittal has broader mandate of recommending measures to improve financial health of Indian Railways.