The growth, evolution and floundering of Indian Railways

From the construction of the first railroad in India that began in 1850, and the first train that was run on April 16, 1853 from Bombay (now Mumbai) to Thana (Thane), to the unimaginable growth of the railway network, the country’s biggest Public Sector Undertaking has come a long way. But at every stage in its evolution, Indian Railways have faced a new set of problems and raised fresh controversies.

Whatever those problems or issues that confront the system there can be no gainsaying the fact that it remains a showpiece within the country and outside. Never mind the upkeep of the assets or rolling stock, along with China and Russia, the Indian Railways top the list of being the largest network. Carrying well over a million passengers every day and moving about 1,000 million tonnes of freight per year, the very fact that the operations have continued for over a century and a half stands testimony to the strength of the systems.

Largest employer

In terms of employment generation, the Railways provide jobs to about 15 million people, not to talk about the indirect employment. Long before the government of India took up the massive National Highways expansion and upgradation programme, the Railways virtually connected every corner of the country and put in place an effective and efficient network to move people and goods across the country.

When the British decided to launch a railway system and network, the objective was entirely different — to maximise political and commercial advantages along specific routes and to provide for both administrative convenience as well as holidaying. But today the norms are different. In addition to expanding the existing network and providing better connectivity, the focus has been on offering more comfort, greater speed, and modernisation of the systems.

The Railways now have a complex system of suburban systems, the Metro rails, the zonal railways, inter-city trains, and the long distance expresses, not to mention the slower intra-regional passenger trains.

From the time of Independence, successive Railway Ministers have done their bit to expand and modernise the systems. From an entirely metre gauge system, it went on to broad gauge as well to gain speed. Finally, it was decided to adopt a unigauge system for easy travel and connections. From coal-fired locomotives, it moved to diesel and then a massive electrification through an overhead electric traction.


Now, the Railways have moved on to super-fast trains, the Rajdhanis and Durantos. Of course, they have not yet reached the age of bullet trains or the special elevated corridors. Plans are being firmed up for these special corridors and semi-bullet kind of inter-city trains. But that will take time.

The Ministry controls the whole show, but the Railway Board takes care of the day-to-day operations. This is the only PSU that has a budget of its own. Like the general budget presented annually to Parliament by the Finance Minister, there is a Railway budget presented by its Minister every year.

The Ministry also has a few smaller undertakings related to the Railways — the Indian Railway Construction company or IRCON, the Container Corporation of India or CONCOR, the Rail India Technical and Economic Services or RITES, IRFC, CRIS, and the IRCTC that handles the catering and the online booking system. The Indian Railways have planned joint ventures to take up the massive Western and Eastern Corridors that will link New Delhi with Mumbai and Kolkata respectively. Several manufacturing units such as the Integral Coach Factory, the Rail Coach Factory, the locomotives units and several other such units like the Wheel and Axle plant, come under the Railways too.

The challenges

It must be to Nitish Kumar’s credit that an objective and professional White Paper was presented to Parliament under the NDA regime. That was when the Railways seriously introspected and identified avenues to save precious resources and invest wisely on projects. But the decisions taken during his tenure paid dividends when his successor Lalu Prasad took over and he cornered much of the credit for the now famous turnaround in its fortunes. The State Governments had to share costs for all new projects and metro rails to ease the burden. Even then, there has been a marked downslide in the Railways, which the present incumbent, Mr. Bansal, is trying to reverse.

The Railways have to become lean and mean, competitive and efficient. The operating ratio, now almost 90, has to come back to below the 80 level. Second, they have to compete with the airlines for one segment of passengers, and with road transport for the movement of goods. Third, despite talking about the potential for private sector participation for years, the Railways have not managed to attract private investments, mainly because they have not been able to spell out a clear policy. Given the need for such massive doses of investment, it is about time that the Ministry and the Board sit with the private sector to make it attractive for PPPs.

Railways left to fend for themselves

The Railways have been left to fend for themselves as a result of which the plan expenditure for 2013-14 has been pegged at Rs. 63,363 crore, just marginally more than the budget estimate for 2012-13 of Rs. 60,100 crore, which was revised downwards to Rs. 52,265 crore.

One of the reasons for the far from robust outlay is that the gross budgetary support is only to the tune of Rs. 26,000 crore, which was up by a meagre Rs. 2,000 crore from the allocation in 2012-13.

The crucial point about the projected plan expenditure is that it is banking upon a contribution of Rs. 6000 crore through the PPP route. Only time will tell if that gets realised.

The Railways are expecting their share of Rs. 2000 from the Road Safety fund, generate internal resources of Rs. 14,260 crore and raise money from the market to the tune of Rs. 15,103 crore.

How bad the railways are placed could be gauged from the fact that they intend to construct only 500 km. of new lines, 750 km. of doubling of lines and 450 km. of gauge conversion.

In 2012-13, construction of new lines was scaled down from the targeted 700 km. to 470 km., similarly gauge conversion too was scaled down to 575 km. from the target of 800 km. Only in the case of doubling the target of 700 km. will be exceeded marginally during the current fiscal.

Therefore it is not surprising that the fund appropriated to the Railway Development Fund has been slashed to Rs. 3,550 crore only for 2013-14. In 2012-13 the allotment was Rs. 10,557 crore, but revised downwards to Rs. 9,984 crore.

All this despite passing through the hike in diesel prices and electricity charges to the freight consumers and the promise to revise fares and freight charges at least twice a year to take care of possible hikes in fuel charges. Another hike could be expected in October perhaps.

During the current financial year, the failure to meet the goods and passenger targets led to a shortfall in revenue to the tune of Rs. 3,383 crore and 3,573 crore respectively for a total of Rs. 6,953 crore.

As a result of this the accounts have been revised to show a surplus of Rs. 10,409 crore from the projected Rs. 15,557 crore. This surplus has been managed by paying lower dividend and cutting down appropriation to the development fund by Rs. 4,574 crore. Only a dividend of Rs. 5,314.05 crore will be paid during the current fiscal instead of the targeted 6,650.34 crore.

Nevertheless, the Railways claimed they had brought the operating ratio down to 88.8 per cent during the current financial year and improve it to Rs. 87.8 crore and have a fund surplus of Rs. 12,000 crore.

The Ministry hopes to transport 1,047 million tonnes of freight, about 40 million tonnes more than this year while passenger growth is pegged at 5.2 per cent. The gross traffic receipts are expected to be around Rs. 1.43 lakh crore in 2013-14.

Konkan Railway completes 11 years

Friday, 23 Jan, 2009

Konkan Railway will be completing 11 years of the commencement of its through line train operations on January 26th 2009.

It was on this day in 1998 that the trains directly connected Mumbai with Mangalore in shortest possible time, reducing the travel between these places from 36 to 16 hours.

In the 11 years, it is the first time that Konkan Railway has not reported any consequential accident on its route in 2008. Konkan Railway has achieved this feat by taking extra efforts to increase safety on its route by executing massive earthworks, widening the slopes, planting lakhs of Vetiver grass as soil erosion control measure, and various other geo-tech works to arrest boulder falls and soil slippage during the monsoon. The efforts have borne fruit. There has not been any major traffic disruption on the route in the past 3 years since the time these massive safety works were executed and a special Monsoon Time Table implemented on the route.

In these 11 years, Konkan Railway has also made significant strides in train operations and innovations. The innovative Anti-Collision Device, a patented technology of Konkan Railway is being implemented in phases over various zonal railways in India. KRCL has now formed a special `ACD Task Force’ to tap the immense potential that ACD has in the domestic and the international market.

However, Konkan Railway has also brought a financial turnaround in the last 4 years, displaying a significant increase in its earnings, total surplus and achieving the lowest net loss and highest Operating index so far. In the past, the World Bank has appreciated KRCL’s practices to bring down the cost of operation and maintenance and termed it a benchmark for others to follow. Further on, Konkan Railway aims at fostering marketing strategies for commercial implementation of its innovative technologies far and wide and nurture efforts to make the Corporation a profit making unit.

Further on, Konkan Railway aims at fostering marketing strategies for commercial implementation of its innovative technologies far and wide and nurture efforts to make the Corporation a profit making unit.