Revamping Organisational Structure Of Railways

Over the years, in the absence of any strategic focus, the railways have steadily deteriorated in terms of service quality, safety and financial performance. Any improvement in given areas require a complete overhauling of the organizational structure of railways.

Many committees and experts have advised for more than a decade now to restructure the Railway Board to cater to the business segments of Railways but nothing changed in its restructuring.

The Government has promised restructuring of the railway board. At present, the Indian Railways is an over-centralized, top heavy structure, divided on departmental lines. The government is working on a revamp plan that would separate its policy-making and operations arms to curb inter-departmental rivalry which is seeped in the culture of protecting vested interests.

Currently, Railway Board is the top-most decision making body of Indian Railways – which performs the multiple roles of concessionaire, authority and regulator. The moot question is – how an authority can do all these functions without conflict of interest? Moreover, performing so many functions by single body will not only promote inefficiency but also leads to centralization of power.

Therefore the recently formed Bibek Debroy Committee in its report has envisaged three entities – the ministry of railways, the railway board and the regulator.

The role of the ministry will be policy formulation for the entire sector and the Railway Regulatory Authority of India (RRAI) will have the powers and objectives of economic regulation, including, wherever necessary, tariff regulation, safety regulation and fair access regulation. It will ensure a level-playing field to the private sector, which have been reluctant to enter the railway sector. The panel has further advocated that the regulator should have independent budget and it must be set up statutorily so that it is truly independent of the railway ministry.

Further, the committee recommended that the railway board should function like a corporate board for railways. The chairman of the railway board should be like a chief executive office and the composition of the railway board should be changed to five members (traction and rolling stock, passenger and freight business, human resources and stores, finance and PPP, and infrastructure) and two independent experts.

Above mechanism will lead to segregation of policymaking and operational functional which is a pre requisite for any successful organization as policymaking focuses on long-term issues and operations focuses on day-to-day functioning of the organization.

Along with the division of functions the committee envisaged the decentralization of decision-making whereby the head of each zone must be fully empowered to take all necessary decisions without reference to the railway board. The report says that the zonal railways should have full powers for expenditure; re-appropriation and sanctions, subject to it meeting its proportionate earning target. Therefore if different zones will work independent centers then it will increase efficiency. The recommendations if implemented will bring increase the competitiveness of the sector and will boost the much needed investments in the sector.