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Why the Indian Railways will be one of the biggest challenges for the next government

Wednesday, 7 May 2014 - 11:46am IST | Agency: dna

Not everyone expected the current election season to be cordial, dignified or be used as a platform to debate crucial economic reforms that India so desperately needs to hot-wire its economy. In fact, other than some discourse available here and there on news channels, debate over pathways to economic reforms has been largely non-existent.

The absence of such debate is probably electorally insignificant to the vast majority. All said and done, both the Congress and BJP are not too far from each other’s economic policy ideology. However, one thing that the now incoming government must deal with is ministerial reforms, specifically with the Ministry of Railways. 

Recently, a retired railway employee narrated to me that as he went to collect his free annual pass for travel with the Indian Railways, he had to wait for four hours as the officer at the station was not in. After waiting, he was informed that in fact the officer was on leave, just that no one knew. “He will come when he wants to come, he is bade sahib, he can do that,” the retired gentleman was told.

No one needs a reminder that the Indian railways is like the nerve centre of India. It is the primary mode of transportation for majority of Indians. However, the entire railway infrastructure has become a quagmire of corruption, inefficiency and political and bureaucratic apathy.

During the current electoral campaigning, one of the most common complaints around the country has been that of the lack of electricity supply. According to data, nearly 380 million Indians live below the ‘energy poverty line,’ that is more than the entire population of US. 

Power companies, both public and private, regularly put lack of railway infrastructure to feed thermal power plants in the country with uninterrupted supply as one of the top most reasons for fluctuating output. Calls have been made from near and far for years on end for a comprehensive overhaul of the Indian Railways, with various committees suggesting the same. However, outcome under successive governments has been superficial.

Reasons behind this neglect are varied, ranging from political compulsions of the railways being used as a big job provider with over a million employees to bureaucratic unwillingness to orchestrate major reforms, which may see job cuts and increased demands and reduced perks off the employees. However, the fact that the railways is too important an asset to “fail”, has apparently escaped every government and railway minister’s strategy. 

Why reforms are urgent here is backed by the fact that even today, it is next to impossible for the railways to adjust its fares according to the demands of the free market. The political fallout of such a move has been seen in the past, most recently when TMC’s Mamata Banerjee withdrew her party member and then railway minister, Dinesh Trivedi, as tariffs were increased under his watch. This, according to her, and many others in Indian politics, was seen as an ‘anti-people’ move. Raising tariffs was interpreted as the government not using the railways as a ‘socially responsible’ resource. 

The fact that tariffs cannot be increased substantially even when the National federation of Indian Railwaymen has repeatedly demanded an average increase of 60% in tariffs, which will raise nearly Rs 12,000 crore in funds, shows how the railways has suffered due to unviable populist policies. The Rail Tariffs Authority, as of today, still waits to be unbiasedly empowered to decide tariff changes. To put matters in perspective further, according to a 2012 report by FICCI and Ernst & Young, only 1,750 km of new tracks were laid from 2006 to 2011. China meanwhile has achieved 4,000 km of new lines, excluding 10,000 km of high-speed links. Modernisation of railway infrastructure has been excruciatingly slow, largely due to funding issues. 

India is in line to set up nearly 400 new thermal power plants across the country by 2018. Most of these will need new rail infrastructure to supply fuel. However, the Railway Board/Ministry of Railways, while being aware of the need to reform and outlining the specifics have been either unable or unwilling to move forward.

It is high time for politics to be kept aside, committees to be put to rest and reforms in the truest sense of the word applied to the Indian railways. No economy can carry a dead elephant on its back for long, which is precisely what the Indian Railways risks of becoming today. The ‘too big to fail’ factor may not materialise if the economy, which is more exposed to global financial risks than ever before, does not support it. 

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