On 24th December 2019, the Union Cabinet chaired by PM Narendra Modi approved Transformational Organisational Restructuring of Indian Railways”. The changes range from restructuring the Railway Board to merging of Group A services is a sign towards a major over haul of the system. These changes in the 150 year old mammoth organisation which has not been subjected to changes will surely create ripples. The restructuring aims to streamline operations and provide flexibility on how to deploy peoples and is also another step towards corporatisation. The world’s fourth largest railway network (behind US, China and Russia) has to come up into the new avatar to deal with the pace and burden of unprecedented changes and new roles in the new ambitious India.
Background
Indian Railways is the premier transport organization of the country is the largest rail network in Asia and the world’s second largest under one management. It runs about 21,000 trains, two thirds of which are passenger trains, carrying 23 million passengers and 3 million tonnes of freight per day. This translates into 1.2 trillion passenger-kilometres travelled a year in India by 8 billion passengers.
It is operated by Ministry of Railways and has a Minister to represent this ministry in the Parliament. Under the Minister there is Minister of State and then comes the eight member Railway Board (including Chairman). The officers manning the office of Railway Board are mostly from organised Group A Railway Services and Railway Board Secretariat Service. IR is divided into 18 zones, headed by general managers who report to the Railway Board. The zones are further subdivided into 68 operating divisions, headed by divisional railway managers (DRM). The divisional officers of the engineering, mechanical, electrical, signal and telecommunication, stores, accounts, personnel, operating, commercial, security and safety branches report to their respective DRMs and are tasked with the operation and maintenance of assets.
Staff are classified into gazetted (Groups A and B) and non-gazetted (Groups C and D) employees. Recruitment of Group A employees is carried out by the Union Public Service Commission Civil Service exam by examination. There is no direct recruitment of Group B employees in Indian Railways, it's only promotional, Group B employees are recruited from departmental promotional exam of Group C employees.
Since its inception in 1951, the railway board was altered just once, in 1986, when Madhavrao Scindia as railways minister implemented the idea of moving towards electrification and member (electrical) was introduced.
Need for Reforms
Indian Railways easily makes to the list of the top 10 employers in the world with nearly 1.3 million employees; the US, Chinese and Indian armies are on that same list, along with Walmart and McDonalds. The Railway Board itself was first constituted under the Railway Board Act of 1905. IR has been governed by an administrative structure that has been in place for nearly a century and run on infrastructure that has been upgraded only piecemeal over that period.
Departmentalism in Indian Railways has been marked by inefficiency and fighting over control of assets and resources, leading to delays in decision making. It took 25 years for the railways to make a simple decision about installing hot cases to keep food warm for passengers. The member (electrical) had one view, while the member (traffic) had another. The Indian Railways had become a mammoth centralised organisation with hierarchical decision-making and a culture of operating in silos. The departments were vertically separated from top to bottom and were headed by a secretary level official or a member of the railway board.
To ensure Indian Railways meets the requirements of a soon-to-be $5 trillion economy, it needs two types of reform: administrative, to improve services, safety and efficiency; and engineering, to improve cost and environmental effectiveness. Since independence, there has been a reform committee/commission of some type related to Indian Railways almost every two years–the famous ones include committees led by Prakash Tandon (1994) on organizational structure and management ethos, Rakesh Mohan (2001) on policy reinvention, Sam Pitroda (2012) on railway modernization, and the latest one by Bibek Debroy (2015) on railway restructuring.
The government has lined up a massive infrastructure development plan of Rs50 trillion to modernise the national transporter in the next 12 years — improving safety, speed, and services. This requires speedy decision making by various departments.
Reforms
This historic reforms will go a long way in achieving Government’s vision of making Indian Railways the growth engine of India's vikas yatra.
The reforms include:
- Unification of the existing eight Group A services of the Railways into a Central Service called Indian Railway Management Service (IRMS). Those eight services are:
- Indian Railway Traffic Service (IRTS)
- Indian Railway Accounts Service (IRAS)
- Indian Railway Personel Service (IRPS)
- Indian Railway Service of Engineers (IRSE)
- Indian Railway Stores Service (IRSS)
- Indian Railway Service of Electrical Engineers (IRSEE)
- Indian Railway Service of Signal Engineers (IRSSE)
- Indian Railway Service of Mechanical Engineer (IRSME).
- Re-organisation of Railway Board on functional lines headed by CRB with four Members and some Independent Members.
- The existing service of Indian Railway Medical Service (IRMS) to be consequently renamed as Indian Railway Health Service (IRHS)
Unification of services will end 'departmentalism, promote smooth working of Railways, expedite decision making, create a coherent vision for organisation and promote rational decision making. Creation of the new service will be done in consultation with DoPT and UPSC to facilitate recruitment in the next recruitment year. It will enable Railways to recruit engineers/non-engineers as per need, and offer equality of opportunity to both categories in career progression. The modalities and unification of the services will be worked out by the Ministry of Railways in consultation with DoPT with the approval of Alternate Mechanism to be appointed by Cabinet in order to ensure fairness and transparency. The process shall be completed within a year. The newly recruited officers will come from Engineering and non-Engineering disciplines as per need and posted as per their aptitude and specialisation to allow them to specialise in one field, develop an overall perspective, and prepare them to take up general management responsibilities at senior levels. Selection for the general management positions shall be through a merit-based system.
The idea of restructuring the Railway Board is to provide cohesiveness and consequently better services to passengers and freight customers. It will have a Chairman, who will act as 'Chief Executive Officer (CEO)' along with 4 Members responsible for Infrastructure, Operations & Business Development, Rolling Stock and Finance respectively.( Earlier the eight members were: member (rolling stock); member (traction); member (traffic); member (engineering); member (staff); member (material management); members (signal & telecom); and financial commissioner). The Chairman shall be the cadre controlling officer responsible for Human resources (HR) with assistance from a DG (HR). 3 Apex level posts shall be surrendered from Railway Board and all the remaining posts of the Railway Board shall be open to all officers regardless of the service to which they belonged. The Board will also have some independent Members (the number to be decided by competent authority from time to time), who will be highly distinguished professionals with deep knowledge and 30 years of experience
including at the top levels in industry, finance, economics and management fields. The Independent Members i.e. the non-executive members will help Railway Board in setting a strategic direction and will be in advisory role. The restructured Board will start functioning after approval of the Board taking due care to ensure that officers are posted in the restructured Board or adjusted in the same pay and rank till their retirement.
Other Significant Reforms
In the past five years; the railway budget has been merged with the general budget, the production units are carved out as corporate entities to explore markets for funds, the cheaper capital was roped in from the pension funds and LIC instead of looking for budget allocations for capital expansions. To bring in private capital for operations, the Tejas Train between Delhi-Lucknow started in July 2019 with operations managed by IRCTC and not Indian Railways. The aim is to eventually invite private operators to run trains on as many as 150 routes on the Indian Railways network. The railway, though, continues to be a government department and not a PSU with a profit and loss statement.
Concerns
The merger of the services may not be a wise move, as compared to the Budget merger. The concept by the government is to have one organisational goal, rather than having agendas set by departments. However, the Railways has a lot of specialised areas. For example, a mechanical or civil engineer cannot be in charge of finance department and vice versa. Hence, there may be technical difficulty for its implementation.
At present, the Railway services are organised into departments like traffic, civil, mechanical, electrical, signal and telecom, stores, personnel, and accounts.These departments are vertically separated from top to bottom and are headed by a secretary-level officers called as members in the Railway Board. There are pros and cons for this move. Unless there is a regulator, a finance person getting the charge of electrical maintenance may not be a very positive sign. There may be some functional departments.
Additionally the members of Group –A services has their own grievance, that raises the question over merging the technical and non-technical, bureaucrats and non-bureaucrats personnel. At the heart of the resentment among officers is the structural division of the Indian Railway Service. While three services — Indian Railway Traffic Service (IRTS), Indian Railway Accounts Service (IRAS) and Indian Railway Personnel Service (IRPS) — constitute the railway’s civil services, the other five constitute the technical or engineering services. They come from different exams. One comes via Civil Services Exam being conducted by UPSC and other by Railway recruitment Board.
There is an issue of specialization and domain expertise. The non-technicals oversee the functioning of the organisation and correct the flaws in the management. The technical ones does not has that kind of managerial mindset and training. Merging both fields will be demotivating for the non-technical ones and will dampen the need of domain expertise. Additionally while the technical ones can be then placed on managerial and administrative positions, but those with managerial specializations cannot be placed at technical positions. While the average age of those who come through the civil service exam is 27-28, that of the engineering service officers is 23-24. The engineering service officers join right after engineering, so they are young. If they get to head departments now, they will have more time in service, and the civil services will lose out.
Way Forward
The restructuring of Indian Railways has been a long awaited decision. The movement on reforms is slow and gradual whereas it needs rapid acceleration. The hope is that this bold step will lead the railways back on the reform track. If the railways need to run on time with enhanced speed, have better infrastructure, allow for predictability, and run as an effective freight carrier, a corporate work culture will need to be introduced like it has been in railway systems across the world through timely reforms. The government-run department still lags behind. The concerns of the staff and all the stake holders needed to be addressed. Any change introduced surely disturbs the status-quo, but the change though in itself is painful but is aimed for the growth and betterment. The season of restructuring is not only limited to Indian Railways, rather the Cabinet Committee on Security (CCS) on had earlier approved the creation of a chief of defence staff (CDS) who will be the single-point military adviser to the government as suggested by the Kargil Review Committee in 1999.
Seems the modern era marked by changing dynamics of administration and management is in search of faster and reliable decision making and efficient organisations to deliver the results which the impatient youth is demanding. It is surely a challenge towards growth and betterment.
