The Great Indian Railway Bazaar

Despite its size and spread, Indian Railways’ gross revenue accounts for less than 1.5 per cent of India’s GDP. On the other hand, the total logistics cost in the country accounts for almost 13 per cent of GDP and compares badly with the US and Europe where logistics account for only about 10 per cent of GDP

On October 7, 1858, when the last Mughal Emperor, Bahadur Shah Zafar left Delhi on a bullock cart, accompanied by his wives, his two remaining sons and servants, for a long exile to Burma, not very far out of Delhi, he saw the railway advancing to connect Delhi to then British Indian capital of Calcutta. The railways had been introduced to India just five years before. Some 165 years later, a railway system of about 53,000 kilometres of track knits India together like never before. It has also changed India by speeding up links between the hinterland and the coastal cities, and moved Indian men and material to all parts of the world. The Indian Railways run the fourth largest railroad network spread over some 64,000 km, with 12,000 passenger and 7,000 freight trains each day from as many as 7,500 stations to carry almost 25 million travellers and 2.65 million tonnes of freight or 36 per cent of the total hauled across the country daily. It is also the world’s largest employer with 1.36 million staff on its rolls. Indian Railways is the only PSU which has a minister presenting a separate budget of its own every year.

Despite its size and spread, Indian Railways’ gross revenue accounts for less than 1.5 per cent of India’s GDP. On the other hand the total logistics cost in the country accounts for almost 13 per cent of GDP and compares badly with the US and Europe where logistics account for only about 10 per cent of GDP. This is not all; the passenger traffic imposes a huge cost on the railways and the nation in turn. India has the cheapest railway fares in the world; even China is five times more expensive.

An example of how little our railway network has progressed consider this piece of trivia: On April 16, 1853 the first ever railway train in India, carrying 400 passengers, covered the 34km distance between Bombay and Thane in about 75 minutes, a speed of 28kmph. A 161 years later, a slow train in Mumbai runs at an average speed of 50 kmph. Even our much-vaunted Shatabdis run at speeds that had already been achieved in pre-war Europe. The Berlin-Hamburg service was launched in 1933 and ran at an average speed of 124 kmph. Peak speeds were 160 kmph. That’s substantially faster than any Indian train today, 80 years later.

The composite index of all the inputs in the railways, including fuel and staff cost, has shot up by around 100 per cent in the last decade, but the increase in freight has been only 35-40 per cent and the passenger tariff by 25 per cent (including the latest hike). The Indian Railways loses money on passenger traffic and make money on goods transportation. The ensuing result is that travel is cheapest on Indian Railways and transporting goods results in higher prices to the consumer. Railway cargo still moves at a snail’s pace of about 25 kmph. This adds to the reduced competitiveness. IR is also faced with a severe shortage of rolling stock. This calls for huge capital investments, for which the Rail Ministry is clearly unable to provide. Bulk goods like petroleum, oil and lubricants, and iron ore are increasingly shifting to pipelines and road transport as time is now a major determining factor. Clearly, IR needs to carry more and carry faster. The strengthening of track to carry heavier loads at faster speeds cannot be postponed for much longer.

Currently railways has 347 ongoing projects under new lines, gauge conversions, electrification and doubling having a throw forward of about Rs 1.50 lakh crore. This shortage of funds has forced the Railways to curtail allocations for majority of projects. Critical areas like research and development, and manufacturing are in equal state of disarray. By rights, given the size of the market, India should have had the best signaling, engine and coach industries in the world. Instead, almost every major piece of technology has to be imported. When we needed a world-class system like the Delhi Metro, we had to import coaches and engines. For the railways it is back to basics. While it is heartening to know that there are plans for bullet trains whizzing past at over 300 km/hour, one should not forget the lament of the aam aadmi, who travels every day. All he wants is a safe,

clean and timely journey. Almost a century ago, Mohandas Karamchand

Gandhi described a train journey in September 1917: “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.”

The daily concerns of today’s aam aadmi passenger remain unchanged. Even today, most train journeys in India continue to be a nightmare. A second class reserved compartment would have shortage of water and stinking toilets even before the journey is halfway mark in addition to unwanted passengers thronging the reserved compartments at every station. Barring the Rajdhanis, Shatabdis and the Duron to Express, travelling in most other trains are still not very comfortable leave alone the security factor which is becoming worse by the day.

The average speed of fastest trains of Indian Railways stands nowhere near to what the Chinese, Japanese and French have achieved in the last one decade. India’s fastest trains log a speed on not more than 150 kmph and would take some time to even reach the level of 200 kmph, the Chinese have surpassed the 300 Kmph mark long time back and now have the longest fast train line in the world, from Beijing to Guangzhou covering a distance of 2,298 kilometres and running a whopping 300 trains on that line every day. Incidentally, to

put things in perspective, TGV of

France is testing a new engine with a speed of 574 kmph.

The state of railway stations is dismal. It a strange anomaly, while Indian airports have become sleeker by the day, and world class highways comparable to the best in the world have come up, the state of the railway stations has not changed. One finds mankind, dogs, cats and even rodents all jostling for space. The Indian railways station is at the same time an arrival and departure port, a hawker zone, a spittoon, a garbage area, an area of crime and pickpockets, imbued with beggars and ticketless travellers as well as a prime hub for all kinds of crimes. It turns out to be an even bigger nightmare when one train is delayed and passengers for the next train arrive in the same platform.

There is no reason why Indian Railways cannot be converted into a corporation like ONGC, NTPC or the Indian Oil for better accountability and efficiency before it becomes another Air India story. If Indian Railways hasn’t collapsed much as Air India, it is because there has been no competition to it. The departmental running of railways would have to stop. It should stop being the fiefdom of a minister and enormous powers in the hands of Indian Railway Board officials. Each of the Railways divisions should be converted into independent profit centres and Railways should concentrate on its core competence rather than making running with the Jurassic mentality to manufacture all and sundry including mineral water.

In the hands of politicians, the Railways has become a milking cow, a plaything to be tossed around and exploited for private gains. 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. Lalu Prasad’s term, ironically, was noted for some significant progress. The reason was, he had neither the time nor the interest to pay any attention to the Railways as he was busy with the turmoil in Bihar politics. Politics in Patna kept him so busy that he told a Railway ministry officer to run the show in Delhi. Untrammelled by politicians, the officer performed wonders.

The Railways needs massive

investments and the Indian private sector should be welcomed to contribute into its reformation. FDI in the manufacturing of railway engines and

wagons should be welcomed. Indian engineering companies like L&T and BHEL have enough engineering capability to churn out world class engines for faster train service.

Narendra Modi’s led government increased the rail fares within days of his tough talk about strong decisions to be taken for reviving the economy. The Rail Minister issued a one liner saying that he was “forced to approve” the decision of his predecessor, as if the government was crying while taking such an unpopular measure. There is no doubt that the rail fare hike was a much necessary exercise to revive the cash-strapped Indian Railways. Now is the time, when Modi must own the changes and push for reforms in the railways. 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.

In a give and take policy, the Railways should now ensure that accidents and rail safety should be given priority. There should be a check on the hygiene standards of railways and platforms. The sanitation level in the train toilets and platform toilets is pathetic and poses a problem especially to the ladies passengers. There should be a check on the Railway Police Force and their lackadaisical attitude. They simply do not listen to the passengers’ problems. In fact, there have been cases of harassment by railway police force personnel registered by passengers. Also, they are ill equipped for the scenarios of dacoity or burglary in the trains.

The privatisation of the Railways or introduction of corporate culture in the Railways as per the recommendations of the Rakesh Mohan Committee should be considered. The railway ticketing system should be revamped. Taking a ticket in case of emergency should not be difficult as it is today. People line up at the tatkal booking windows and open the IRCTC websites but still fail to get a ticket. The two months window for the ticket booking too does not offer much help.

The systemic unbalance in

the administrative set up of the railways is also a cause of concern.

Indian Railways is perhaps the only railway system in the world that still has its own full-fledged medical, security and manufacturing establishments. This 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.

Nandan Nilekani writes in his book, Imagining India: “When I visited Sudhir Kumar at the railway ministry, what struck me was that a big part of his job was battling this inertia within the bureaucracy and in the railway regulation. He described his astonishment when on a visit to the Rail Museum he found documents and weight standards for rail track dating from 1922 that were exactly the same as the standards the Indian Railways use now.”

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.

The attitude of ‘Nothing can be done’ and that ‘the Railways is too big to bring systemic change’ should change. If E Sridharan could create a world class metro rail right in this country with the same engineers who were part of Indian Railways, then it merely vindicates that the issue is never of capability but the management culture and intent to bring reforms which perhaps is now lacking. The Indian Railways needs to be a dreamer and dream to convert a moribund colonial legacy into a world class transporter comparable to the best in the world.

By Anil Dhir