Reforms must begin with the all powerful railway board

The Indian Railways will have to be allowed the flexibility to exploit their full potential for expansion and for moving up the value chain. While high-speed rail networks and bullet trains are dream projects to shake up the system, real reforms will have to happen with the support infrastructure that is virtually reeking and moribund. However, given the dynamism that minister Piyush Goyal has brought to the job, the PMO and finance minister Arun Jaitley should provide adequate support in ensuring delivery of path-breaking reforms in the rail sector. Jaitley will have to find resources to make 10 per cent higher allocation. If the railways deploy these funds to meet wage bills, then Goyal may find very little support for his pre-budget proposals. But, if tracks were to be redone, new infrastructure to support high speed rail or bullet trains were to be laid, then higher than last year’s Rs 1.31 lakh crore outlay will be more than justified. But, it must be noted that till the minister finds a way to undertake massive market borrowing or tap the global bond market for long-term funds, finance minister Jaitley may have to handhold the ministry to enable it to contribute to economic growth and infrastructure development. While Rs 55,000 crore was provided from the centre’s kitty last year, a 10 per cent increase is a measly Rs 5,500 crore that’s minuscule in the Rs 8.56 lakh crore capital outlay over the next five years. Reforms must begin with the all powerful railway board that is dominated by a steely bureaucracy of every shade and background. Professionals with expertise in infrastructure development, railways technology acquisition and development apart from core finance will have to run the board. Splitting the railways into five companies run on profitability principle will have to be seriously considered. One reason for the finance ministry’s resistance for a larger pie of resources from the general pool would be ‘poor absorption’ capacity given that public-private partnerships have not taken off in the last few years. Hence, doubling the capacity to implement complex rail infrastructure projects could well turn out to be an issue to ponder over. Unless investment is made in refurbishing the cargo infrastructure and improvement in basic facilities for passengers, the railways cannot dream of catapulting into kick-starting economic growth engines. On the parallel, bringing about self-sufficiency in the organisation that is considered one of the largest networks must happen quickly. Carving out railways as one big node in the multi-modal transport infrastructure is a medium-term issue that needs to be tackled deftly. Given PM Modi’s ‘emotional connect’ with the railways and his preference for high profile projects like bullet trains, there cannot be any slip-ups in railways expansion and green field projects. Several new lines, railway networks and infrastructure projects have been on the drawing board over decades. These need to be dusted up and sequenced for implementation based purely on merit as well as viability and not on political considerations. For long, the Railways have been the biggest employer and turned itself into a unmanageable organisation pulled from every side. Downsizing and rightsizing this organisation along with re-organisation must be taken up immediately.