Bibek Debroy Committee Recommendations

The Bibek Debroy Committee is a high level committee for “Mobilization of Resources for Major Railway Projects and Restructuring of Railway Ministry and Railway Board” created by NDA Government after coming into power in 2014. This is yet another Biblical size report in 319 pages and reviews almost all areas of Indian Railways operations. The key recommendations of this committee are as follows:

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).

Transition to commercial accounting

Indian Railways should shed its complicated accounting and move to standard commercial accounting by following principles and norms accepted nationally and internationally. Appropriate financial disclosures will facilitate investors in assessment of risk and taking decision to invest in Indian Railways. It will also help Railways to quantitatively assess impact of policy interventions on cost of various services.

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).

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.

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).

Encouraging private entry

Private sector should be allowed into running both freight and passenger trains in competition with Indian railways. Private participation should also be allowed in various Railway infrastructure services and non-core activities like production and construction. A separate track holding company, which remains public, be formed to provide access to railway tracks to private players.  This track holding company will be neutral between Indian Railways and the private players.

Joint Venture with State governments

Railways should partner with State governments in construction of new suburban lines. There are too many Zones and Divisions and thus a rationalization exercise is required.

Changing relationship between government & Railways

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.

Raising resources

An Investment Advisory Committee may be set up, consisting of experts, investment bankers and representatives of SEBI, RBI, IDFC and other institutions for raising resources for investment.