Our railways have made efforts to increase the standards of the trains, provided ease of access to the passengers by enabling them to check the pnr status on mobile sms and build new tracks. Though the Indian railways have shown appreciable performance over the past few years, there is an argument that it is still far beyond its capacity. Indian railways have a severe capacity constraint. It is because of this reason; the railways weren’t able to capitalize on the increasing demand of freight transport. National Transport Development Policy has passed several suggestions to increase the orientation of railways towards the commercial sector.

Booster shots of privatization:

There were a few suggestions to privatize the railways to some extent so as to ensure reliable performance. The following are the expected outcomes of privatization:

• Indian railways have targeted to increase a track length of about 2,500 kilometers every year. However, it only manages to increase about 180 kilometers. Privatization provides the flexibility of sharing the expenses with the private firms.

• It is to be noted that over 10% of the railways income is utilized to run its noncore activities like schools and hospitals. Outsourcing these activities would turn as a huge sigh of relief to the railways.

• A few major railways projects are delayed for a variety of reasons. The best way to put an end to this time lag is to divide the railways into smaller companies. Projects can be executed in the least time possible by doing so.

Inspiration from Japan and Argentina:

Experts suggest that the mix of reforms that took place in Japan and Argentina can be implemented here in India to boost its standards like never before. The above statements of privatization have their roots in these countries. Prior privatizing the railways in Japan, it suffered a huge loss of about $50 million per day. However, the further consequences have made it to lose its autonomy over railways.

• Japan railway reforms: All the services were split into joint stock companies as a part of their reforms. Six major firms took up the responsibility of passenger services whereas the freight was handled by a single company. Another reputed corporation takes care of the bullet train services. A distinct body is setup to clear the historical debt of Japanese railways. These reforms have increased the profit earned by the railways and also lowered the risk of accidents.

• Argentina railway reforms: Argentina showed their interest in privatization after incurring huge losses of $1.4 billion annually. This strategy allows bidders to quote their bids to take up the servicing and maintenance tasks. This greatly helped Argentina to cut down their expenses incurred on its subsidies to commuter services.

However, the practicality of these reforms isn’t easy with India railways. Indian railways comprises of 17 administrative zones; 8,000 railway stations; 15,000 trains and over 13 lakh employees. These numbers speak about the vastness of our railways. The Indian government isn’t in favor of privatization, as it can’t subsidize the poor passengers.

In an effort to improve quality and efficiency of train services, the Indian Railways is setting up consultative committees at various levels as well as arranging for election special trains targeting Lok Sabha and Assembly elections.

The committees will be able to consult and contribute to railways administration, as informed to the parliament by the Minister of State for Railways, Manoj Sinha.

The aim behind announcing such committees was to connect railway administration with end users and various levels of the railway department so that quality of services could be improved. The committees would ensure better representation for travellers with railways administration.

He said that at the ministry level, there would be a National Railway Users consultative committee. At the head quarters level, there would be a zonal committee and at the divisional level, there would be zonal committees.

There would also be consultative committees for suburban railway users at South Eastern, Eastern, Southern, Western and Central Railways. There would be station committees at select, important stations.

An example for improving efficiency was that the ministry had taken a series of actions like cancelling contracts after it received almost 5000 complaints about catering on long distance and premium trains, lodged last year.

Action taken includes warning in over 1000 cases, fines in over 2000 cases and termination of contract in one case , all awarded as per gravity of offence.

The minister announced a slew of new measures: 10 sophisticated and mechanized base kitchen operated by IRCTC, extending e-catering services from 45 major stations to all A and A-1 class stations, introducing multi-purpose stalls at stations and making catering services optional rather than mandatory in trains. Passengers can book meals after checking PNR status railway.

The minister also suggested that Indian Railways may run Election special trains similar to festival special trains. This would be introduced to cater to demand in the peak season during election time, on particular routes.

The minister informed Lok Sabha that such special trains have been planned thanks to the growing demand. In reply to a supplementary, he said that suggestions given by MPs would be kept in mind.

The supplementary did not address the purpose of an election special train. But the minster noted that the there was great demand for such trains especially for natives of Bihar and Uttar Pradesh who are working in other states and wanted to vote for elections being conducted in native states.

Many workers preferred not to change their constituencies when they travel to other places for work. This was despite the notice given by the Election Commission that workers in other states are free to vote in these states after filling up two forms: one to get enrolled in the electoral rolls of the new place and second to cancel their names form electoral rolls of their native state.

In response to another question, the Minister said that Antyodaya trains will operate on regular fares, but Hamsafar and Tejas trains would run on ‘dynamic pricing.’

Indian railway is running through a tough phase in the recent past years. The traffic in the railways stations seems to be diluting significantly. This in turn affected the revenue of the department. This undesirable drift in the Indian railways has forced the authorities to take advantage of every possible way of improving the revenue. The revenues have dropped drastically to a single digit…! Let’s have a deeper insight into these issues:

• The passenger earnings are anticipated to grow by 16.7 percent. However, the whole department was taken by surprise, when the earnings were dropped from 15% from last year to 7% for the present year. This is absolutely nowhere close to the expected growth.

• It is interesting to note that Railways earn more than two fifths of their revenue from freight traffic. In this context of freight traffic, the railways have witnessed an increase of 8.5 million tons against the estimated increase of 85 million tons!

• In such unfavorable conditions, the railways department has successfully controlled their working expenditure. Talking about the numbers involved here, the working expenditure increased just by 1.5% against the estimated value of 9.6%.

• Apart from the revenue crisis, the railways has to bear an additional burden of 32 thousand crore rupees to pay towards implementing the seventh pay commission recommendations. Adding to this, the budgetary support has sliced 8 thousand crore rupees due to the low spending by our railways.

• When you check out for the Indian railway PNR this time, note that the fares are likely to get increased by 5 to 10 percent in the coming budget sessions. Though the hiking of railway fares is strongly believed to be a politically unpopular move, the railways are left with no other option.

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  • If the railways have to consider other options of getting revenue, it is through the monetization of the existing assets. The authorities are going to have a keen eye on these aspects.

  ow the railway plan for the coming season…? It targets to improve the daily passenger carrying capacity from 21 million to 30 million. A 20% increase of the track length is likely to take place in the coming year. Finally, the freight carrying capacity is all set to increase from 1 billion to 1.5 billion tones. Not to forget that, Indian railways always had a passion for modernized infrastructure and the same is reflected in their actions.

• The above targets seem to be highly impossible to accomplish with the current status of our railway revenue. It is estimated that 8.5 lakh crores will be required by our railways to reach their targets. Several world organizations have accepted to aid financially in this context.

• BK committee has made several suggestions to increase the revenue of the railways. One such suggestion is creative financing. The public and the private investments will be a part of this plan. It is estimated that, this method can generate a whooping revenue of 3,29,800 crores.

The Indian railway is likely to concentrate on the steps to increase the freight revenue. It shouldn’t be a surprise for us, if it starts to explore the untapped areas like auto and FMCG, in search of revenue.