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Bibek Debroy Committee On Railways

Bibek Debroy Committee On Railways

Introduction

  • The Union Cabinet approved restructuring of the Railway Board in 2019 which was in line with the recommendations of numerous committees, notably Rakesh Mohan (2001) and the Bibek Debroy panel (2015).
  • The eight railway services to be integrated into a central service called the Indian Railway Management Service (IRMS). All employees at the management level will come into the Railways through one service — the IRMS.
  • The number of Railway Board members were to be reduced to five from existing eight.
  • The Indian Railways is organised into service departments such as traffic, civil, mechanical, electrical, signal & telecom, stores, personnel, and accounts.

Background  | Bibek Debroy Committee On Railways

  • The Railway Board had constituted a Committee for mobilization of resources for major railway projects and restructuring of Railway Ministry and Railway Board under the Chair of  Mr. Bibek Debroy.                       (Bibek Debroy Committee On Railways)
  • The committee submitted its report in June 2015.

Railway Board

  • The Railway Board was constituted in 1905 as the chief administrative and executive body to assist the Minister of Railways.
  • It consists of a Chairman and seven members from different service departments such as traffic, civil, mechanical, electrical and signal & telecom.

Key Findings And Recommendations Of The Committee  | Bibek Debroy Committee On Railways

  • Encouraging private participation
    • As per the report of the committee one of the key reasons for the failure of private participation in Railways is that policymaking, the regulatory function, and operations are all vested within the same organisation, that is, the Ministry of Railways. The Committee recommended that the three roles must be separated from each other to have sustained and large scale private participation. Railways’ monopoly discourages private sector entry into the market. Secondly, schemes for private sector participation are not prepared with the involvement of stakeholders. Thirdly, the schemes are designed such that the risk lies mostly with the private parties.
  • Rail Privatisation pros
    • Improved Infrastructure – It will lead to better infrastructure which in turn would lead to improved amenities for travelers.
    • Balancing Quality of Service with High Fares –  The move would foster competition and hence lead to overall betterment in the quality of services.
    • Lesser Accidents –  Because private ownership is synonymous with better maintenance, supporters of privatisation feel that it will reduce the number of accidents, thus resulting in safe travel and higher monetary savings in the long run.
  • Rail privatization cons
    • Coverage Limited to Lucrative Sectors – An advantage of Indian Railways being government- owned is that it provides nation-wide connectivity irrespective of profit. This would not be possible with privatisation since routes which are less popular will be eliminated, thus having a negative impact on connectivity. It will also render some parts of the country virtually inaccessible and omit them from the process of development.
    • Fares –  Given that a private enterprise runs on profit, it is but natural to assume that the easiest way of accruing profits in Indian Railways would be to hike fares, thus rendering the service out of reach for lower income groups. This will defeat the entire purpose of the system which is meant to serve the entire population of the country irrespective of the level of income.                   (Bibek Debroy Committee On Railways)
    • Accountability –  Private companies are unpredictable in their dealings and do not share their governance secrets with the world at large. In such a scenario it would be difficult to pin the accountability on a particular entity, should there be a discrepancy.
  • Establishment of Independent Regulator RRAI
    • The report recommends setting up an overarching Railway Regulatory Authority of India (RRAI) as an independent regulatory body. The independent regulator shall ensure fair and open access and set access charges; establish tariffs in cases where there the market fails to discover a price; and adjudicate disputes between the track-owning organization and train operators; and between competitors. This will make fair and open access a reality and open up both freight and passenger trains, in competition with IR. The Railway Board should continue only as an entity for the Indian Railways (PSU).
  • Financing of Railways
  • Financing of Railways is a challenge because:
    • Investment is made in projects that do not have traffic and hence do not generate revenue
    • The unbalanced mix of passenger and freight traffic does not help generate revenue
    • The efficiency improvements do not result in increased revenue, and
    • Delays in projects result in cost escalation, which makes it difficult to recover costs. Railways has also been mostly financed through internal resources and budgetary support, and not through external resources. Thus there has been no financial oversight of its projects.
  • Streamline recruitment & HR processes
    • The present systems of recruitment into Indian Railways through various channels need to be streamlined.
    • It recommended that present eight organized Group ‘A’ services in Indian Railways can be broadly categorized in two bigger groupings viz. technical and non-technical services.
    • The Indian Railway Technical Service (IRTechS) comprising the existing five technical services (IRSE, IRSSE, IRSEE, IRSME and IRSS) and the Indian Railway Logistics Service (IRLogS), comprising the three non-technical services (IRAS, IRPS and IRTS).
  • Restructuring of Railway zones
    • Indian Railways has 17 zones, which are further divided into 68 divisions. The present zones have developed historically and not from a specific strategy. Hence, there is a need to restructure the organisation’s zones and divisions.
  • Focus on core areas
    • Indian Railways should focus on core activities to efficiently compete with the private sector. It will distance itself from non-core activities, such as running a police force, schools, hospitals and production and construction units. Immediate integration of the existing Railway schools into the Kendriya Vidyalaya Sangathana set-up. Instead the needs of the children of Railway employees could be met through subsidizing their education in alternative schools, including private schools.
  • Decentralisation
    • Decentralisation should happen at the bottom level duties. To ensure proper decentralization, there is a need to delegate enhanced powers, mainly related to tenders connected with works, stores procurement, service or even revenue-earning commercial tenders, to the DRMs. Finance must completely be under the DRM; ADRMs should be an explicit part of the administrative chain; some earnings by the Division should be retained at the level of the Division.
  • Merging of Railway Budget with General Budget
    • The committee recommended that a separate Railway budget should be phased out progressively and merged with the General Budget and eventually also integrate the Ministry of Railways with Ministry of Transport
  • Accounting reforms-transmission to commercial accounting system
    • The current accounting system does not provide details of the cost of various activities and services, such as the introduction of new trains and scheduling of stops. It neither tracks assets nor assesses liabilities.
    • Consequently, it becomes difficult to compute the costs and benefits of any project or activity. In this regard, the Committee recommends switching to a commercial accrual-based double-entry accounting system.
    • This would clearly distinguish between revenue and capital expenditures and present a complete picture of debt and other liabilities.
  • Indian Railway Manufacturing Company
    • Presently wagons are produced by the private sector. Coaches and locomotives could follow the same.
    • The Committee proposes that all these existing production units whether it is for coaches or locomotives should be placed under a government SPV known as the Indian Railway Manufacturing Company (IRMC).

Restructured Board    | Bibek Debroy Committee On Railways

  • The Board will now consist of five members – Chairman, who will act as a CEO, along with four members responsible for infrastructure, operations and business development, rolling stock and finance.
  • There will also be a Directorate General – Human Resources (DG – HR) under the Chairman. The Board will also have some independent members, who will be highly distinguished professionals.                       (Bibek Debroy Committee On Railways)
  • The Railways will upgrade the 27 General Managers (GMs) working at zonal levels to secretary level grade – highest in the government of India.
  • The modalities and unification of the services will be worked out by the Ministry of Railways in consultation with the Department of Personnel and Training (DoPT).

Objectives   | Bibek Debroy Committee On Railways

  • It will streamline railway operations and provide flexibility the way Railways deploy people.
    • It is a step towards corporatisation.
    • Corporatisation refers to the restructuring or transformation of a state-owned asset or organization into a corporation.
  • The integration of service departments will cut the clutter in decision making and organise the working of the Railway Board and its zones along more commercial lines. This will also end departmentalism.
    • The lack of coordination between the maintenance and traffic staff is said to have played a role in the Khatauli rail mishap near Muzaffarnagar in August 2017.
    • (Bibek Debroy Committee On Railways)

 

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