Saving the Railways, for the aam aadmi

The government must stop tinkering with this public service provider in the name of coalition dharma. There should be a freeze on adding passenger trains and the focus must shift to improving existing services.

A Railway Minister is sacked midway through the budget session of Parliament, a rather bizarre first even for the 160-year-old rail network. An information website, http://railradar.trainenquiry.com shows that at any given moment, not more than 60 per cent of the trains are running on time. These two seemingly related, yet unconnected, scenarios have one common factor: the aam aadmi. In the first case, the Minister’s well intentioned move to raise lower class passenger fares was seen by the powers that be as blatantly anti-aam aadmi. The second is the ultimate manifestation of a policy of relentless proliferation of train services each year in the name of helping the aam aadmi, without adequate line and terminal capacity and supporting infrastructure, leading to an overstrained system. During the last decade, the number of new train services announced during each budget varied from 46 to 105 under four different Railway Ministers. This excludes frequencies of trains which were increased, and extensions of existing services.

Calculating punctuality

More than most other sectors, many initiatives and decisions taken (or not taken) by the Railways are supposedly for the benefit of the aam aadmi, the proverbial common man. This focus is unavoidable as the Railways remain the cheapest, yet fastest, mode of travel for the country’s millions. However some of these measures have exactly the opposite effect in the long run. In the case of the burgeoning additional train services, even a minor incident has a cascading effect on the punctuality of a large number of trains, inconveniencing tens of thousands of passengers. Punctuality at intermediate stations is almost non-existent. The Railways’ own statistics of punctuality put the figure usually above 90 per cent. This is because the Railways reckon punctuality based on the right time of arrival at the destination, irrespective of how late a train is in between, whereas the website shows the actual “instantaneous” position. To achieve destination punctuality, the running schedule is often padded up with extra time towards the end of the journey. This in effect eats into line capacity.

Railways in general and Indian Railways (IR) in particular, because of its large public service footprint and load of unremunerative projects, are inherently “unbalanced” financially. Long gestation periods of projects, their capital intensive nature and time lag between investment and generation of revenue make substantial budgetary support from the government unavoidable. The usual advice to IR to generate revenues by monetising “surplus” land or selling off scrap is that much pie in the sky — the revenue inflow from such sources is at best sporadic, unpredictable, process-ridden, and, ultimately, self-limiting. Whereas the main items of expenditure — staff and fuel/energy costs — often vary almost instantaneously, the only immediate means available to even partially offset them is an increase in fares or freight tariff.

Behind ‘no fare increase’

No one asks a fruit seller whether an apple that cost only Rs.20 till yesterday and now being sold at Rs.30 will taste sweeter. No one expects the duration of power cuts to reduce even if the power tariff is doubled overnight. Such increases are taken in their stride as the natural consequence of inflation, rise in input costs or market forces. But the moment the Railways increase the fares even nominally, the demand or expectation is for “additional facilities.” The Railways themselves are to blame to a large extent for nurturing such unreasonable expectations, keeping fares unchanged over long periods, ostensibly in the interest of the aam aadmi. Instead, freight tariffs are increased, either directly or by indirect levies, to compensate the loss on the passenger front. This increases transportation costs of essential commodities, pushing up prices affecting the aam aadmi over a wider population. It is this shifting of the burden from the actual rail users to the society at large that is applauded in Parliament with loud thumping of desks whenever a Railway Minister heroically announces “no fare increase.” While some cross-subsidisation is unavoidable in the Indian context, prolonged suppression of passenger fares also imposes costs on the society. The setting up of an independent Railway Tariff Regulatory Authority, hinted at in the last budget, should hopefully free the Railways from the politics of fare and freight tariff fixing, pun unintended.

Administrative costs

The “unbalance” is also systemic. IR is perhaps the only railway system in the world that still has its own full-fledged medical, security and manufacturing establishments. Consequently, it carries a disproportionately heavy burden of administrative costs. There are more security personnel (60,000) and medical staff (57,000) than train drivers (36,000) apart from 44,000 in the Railways’ functioning production units. This is not to belittle the contributions of these sectors but to stress that with its present organisational structure, the staff costs are disproportionately high. Added to this is the decadal onslaught of the Pay Commission that delivers a virtual body blow to Railway finances. The last (Sixth) Pay Commission added about Rs.13,000 crore to the annual wage bill, representing a 50 per cent hike during 2008-09.

Fine. So, why don’t the Railways shed the off-line activities and get out of the ambit of the Pay Commission by appropriate restructuring? More easily said than done. At least four Expert Committees in the last two decades have recommended some form of reorganisation, away from the monolithic bureaucracy of today. But to expect the Railways themselves to initiate any basic structural change is like asking a man to voluntarily jump off a cliff. The initiative or push for such change has to come from outside. And any such change is bound to be painful and even disruptive for a period, and a major political gamble. But given the realities of coalition politics of the day, it is highly unlikely that any government at the centre in the foreseeable future will have the stomach to even attempt such a major initiative.

What are the implications of the status quo to the aam aadmi? First, there is only so much that one can expect, in terms of quality of service, from a monolithic bureaucratically structured entity operating as a virtual monopoly in the railway sector. This is not a reflection on the quality or commitment of a majority of railway personnel but has a lot to do with the incentives driving a form of organisation that is designed for stability, is precedent-driven, risk-averse and focused on vertical, functional silos.

Freight corridor opportunity

Second, as structured at present, heavy staff costs buck the generation of internal resources. The Railway Budget 2012-13 proposed an outlay of Rs.7.35 lakh crore during the 12th Five Year Plan (2012-2017) of which the major share of funding of Rs.2.5 lakh crore (34 per cent) is through gross budgetary support (GBS), followed by Rs.2.18 lakh crore through Extra Budgetary Resources (mainly commercial borrowings), Rs.1.99 lakh crore through internal resource generation (IRG) and the balance from other sources. The Plan is thus heavily dependent on GBS and costly commercial borrowings. Under the circumstances, adequate and consistent budgetary support becomes a necessity, not an option. It however needs to be remembered that this funding source (GBS) has myriad alternative uses in other crucial sectors affecting the aam aadmi, such as health and education.

What are the immediate prospects? There is a window of opportunity presented by the two Dedicated Freight Corridor (DFC) projects which are already in progress, that can boost the freight earnings substantially and release capacity in the existing trunk routes. It is of utmost importance to complete these projects and make them operational before the effects of the next Pay Commission deal a near-fatal blow to the Railways’ finances around 2017-18. In the interim, no additional passenger train services should be introduced.

For the Railways it is back to basics. While it is necessary to dream about and plan for bullet trains whizzing past at over 300 km/hour, it is useful to remember the lament of an “aam aadmi” almost a century ago:

“During the whole journey, not once was the compartment swept or cleaned. The closet was also not cleaned during the journey. No water in tank. The return journey was no better. The compartment itself was evil looking…..It was pestilentially dirty” — Mohandas Karamchand Gandhi, describing a train journey in September 1917.

The daily concerns of today’s aam aadmi remain unchanged. The period of moratorium on additional passenger train services should be utilised to pull up the quality of basic services offered to the aam aadmi in terms of safety, punctuality, cleanliness and courtesy.

As for the political establishment in general and the highest levels of the government in particular, here are a few suggestions: Stop tinkering with the Railways in the name of “coalition dharma”; treat it on a par with the “Big Four” — Home, Finance, Defence and External Affairs; evolve a National Railway Policy with consensus across the political spectrum and a long-term common minimum growth plan spanning at least 10 to 15 years, that will be binding irrespective of who or which party or combination is in power.

A climate of drift, sudden policy switches and adhocism only serve to keep a great institution far below its true potential. And that perhaps is the biggest disservice that can be meted out to the nation’s aam aadmi.

(K. Balakesari is Former Member Staff/Railway Board. Email: balakesari_k@hotmail.com)

http://www.thehindu.com/opinion/lead/saving-the-railways-for-the-aam-aadmi/article4415597.ece

Advertisements

The URI to TrackBack this entry is: https://indianrlys.wordpress.com/2013/02/18/saving-the-railways-for-the-aam-aadmi/trackback/

RSS feed for comments on this post.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: