Which way is the Indian Railways heading?

Policywise, the Indian Railways is at crossroads. Its bureaucracy, which the public carrier has developed over the decades, enjoys autonomy which is hardly available to any other government department. Largely insulated from governmental interference, it also does not face any competition in its own sector. 

While, the IR has indeed traced an exciting journey from a colonial carrier to the public enterprise of an independent nation, it has not passed through many curves. But at this point of time when high growth and private participation are the mantras of a successful economy,   the national carrier has suddenly landed in a situation where it finds itself unable to decide about the future course of direction.

Colonial rulers developed railways to add speed to the transportation of natural resources from the hinterland to the ports. They also wanted the country to be well integrated so that it can reduce problems in governance.  The IR had to carry soldiers and weapons to different parts of the country so that any rebellion could be quelled easily. After the plunder on an unprecedented scale, India was left with a huge army of cheap labour and the rulers made the IR a labour intensive enterprise.

So, when the country gained independence, the political leadership was faced with the challenge of transforming this national carrier from a colonial enterprise into a public serving network. The priority of the Railways changed drastically. Now, railway lines were not directed towards ports and army cantonments, but were spreading into backward and remote areas.

The priority was to carry essential commodities to large masses and natural resources to big industrial projects, which, in the eyes of Jawaharlal Nehru, were “temples of modern India”. Helping the common man in travelling to destination of his choice became the goal of railways. 

This transformation entailed essential changes in the railway bureaucracy and structures and institutions like the Railway Board came up. The Board is a body which insulates the railways from direct governmental interference and it has been enjoying almost absolute powers in running railways. 

However, several shortcomings emerged in the decades-old structure and the political leadership showed no inclination towards addressing them. Corruption was the most dangerous of all these shortcomings. It pushed the system into a continuous rot.

Right from awarding tenders to allocating seats on running trains, the railways has become one of the most corrupt organisations in the eyes of a common man. The hard labour put in by an average railway-man and his capacity of working in adverse conditions loses its impact because of this image. 

Even before the national transporter could address its problem, it was faced with a challenge from the new economic regime which had new paradigms for running organisations. Growth and privatisation were the main slogans of this regime. Hardly any sector is there which has remained immune to the changes.

But railways could resist changes because of its huge manpower led by strong trade unions. It opposed the concept of commercialisation. The political situation in the cou-ntry helped it, too. Despite the fact that two leading political parties, the BJP and the Congress, were in favour of liberal policies, they could not force IR to adopt the World Bank-inspired policies because none  had an absolute majority to make the decision. 

However, many services, including catering, sanitation and on board supply of blankets etc, have now been privatised. The participation of private sector also increased significantly when Trinamool Congress leader Mamata Banerjee and her representative Dinesh Trivedi were railway ministers. Trivedi even tried to adopt an aggressive policy towards commercialising services provided by the railways. But he had to lose his job because Mamata could not afford to have a corporate-friendly image as she was competing with the Left Front in West Bengal.

Centres of resistance
Soon after taking over power with an absolute majority in Lok Sabha, the Narendra Modi government declared its intent of modernising and liberalising the IR. Aware of the centres of resistance within the railways, the new government targeted railway bureaucracy and its apex body, the Railway Board. A high level committee was formed with Bibek Debroy as its head. All the members, including Gurucharan Das, were known champions of liberal economy.

The committee recommended dismantling of railways’ bureaucracy, including the Railway Board, abandonment of welfare activities, privatisation of all the activities and services including manufacturing. It wants railways to turn into a complete commercial organisation.

Even before the Debroy Committee submitted its report, Railway Minister Suresh Prabhu had started making changes in the structure of railway bureaucracy. He stripped off railways of its financial powers and delegated it to zones. Other powers were also decentralised. The government on its part, approved new guidelines for Foreign Direct Investment (FDI). Now, the IR has been completely opened up to foreign capital. Earlier, it was decided that the core activities would not be opened to foreign investments. The new guidelines, however, have even opened up safety.

Trade union leaders Shivgopal Mishra and M Raghaviah have vowed to resist FDI and privatisation in core sectors. But, FDI is being sought in every sector. A clear shift in paradigm is evident from the fact that dynamic fare is being charged on important trains. The railways considers it a waste to lay rail lines in backward areas, but is ready to invest Rs 98, 000 crore for a high speed rail on 543 km-long Mumbai-Ahmedabad route to reduce a few hours of journey. 

On the other side, global giant Deloitte is reviewing manpower requirement in IR. In this atmosphere of conflicting trends, industrialist Ratan Tata is rediscovering railways’ potential of changing into an efficient public transporter. The Modi government hardly knows which is the right direction for railways.