Understanding the Issues in Indian Railways

It was in 1853 that India saw the introduction of the railway system. By the time India became independent, there were 42 rail systems. By the year 1951 they all became a part of the same unit–one of the largest railway networks worldwide. However, there are some major issues in the Indian Railway that the government is dealing with. The Indian Railways (IR) is caught in a low incremental-growth trap, and it continues to ignore dangerous foreshadowings of following in the footsteps of the ailing Air India. Once a true ‘Maharaja’ airline, the national airline now bears the shame of being a bankrupt organisation.

Issues in Indian Railways

Despite significant progress in both quantitative and qualitative terms in recent years, the Indian Railway system is still plagued by several issues that require immediate attention.

• Safety

The Indian Railways have been in the news lately, although for all the wrong reasons. With the tremendous expansion in passenger and freight traffic, the frequency of railway accidents is rapidly increasing. This has caused major public concern about the empowered safety regulators and the overall health of the railway network. Hence empowered safety regulators being perfect is the need of the hour.

The legitimacy of a nation-building organisation has been severely undermined. It’s only logical to wonder where the railways are going. Table 28.6 summarises the biggest railway accidents of the last decade, from 1995 to 2005. The railways reported 20 collisions, 350 derailments, and 80 level crossing incidents in a typical year.

• Cost and revenue issues in Indian railways

The Indian Railways, like most government organisations, is plagued by a persistent financial crisis. During the last few years, the yearly rate of expense growth has surpassed that of revenue growth. An analysis of railway finances from 1998 to 2004 showed that income climbed at an average annual rate of 8.7%, while costs increased at a 9.65% yearly rate.

• Low employee productivity 

The Indian Railways are dealing with a major issue of low employee productivity. Indian Railways’ transport production in terms of passengers and freight tonne-kilometres per employee is barely 400, compared to 500 for Chinese Railways and 570 for French Railways.

• Employee Salaries 

As a result of the Fifth Pay Commission’s recommendations, staff wages have risen dramatically, putting significant strain on the Railways’ financial resources. Staff pay and allowances, which accounted for 41.7 percent of GTR in 1996-97, increased to 47.8 percent in 1997-98 and 53.3 percent in 1998-99. With life expectancy increasing and pay increases occurring regularly, the situation will likely deteriorate, leaving little room for expansion plans.

• Lease charge increases 

Due to a lack of funds, Indian Railways is forced to rely on market borrowings, which results in higher lease prices. Market borrowing began in 1986, and the trend is continuing. Lease expenses currently account for approximately 8.5% of income.

• Slowing revenue expansion

Revenue growth has slowed due to the saturation of trunk routes and poor service quality and reliability. Railways are increasingly being used to transport bulk goods for the public sector, although they are losing ground to motorways. Most national highways run parallel to railways and continuously steal income from them.

• The Social Burden

Indian Railways must fulfil both revenue-generating and social-obligation functions. The “split personality” was described by the Expert Group, which was formed in December 1998 to analyse the railway sector. On the one hand, the railways are regarded as commercial organisations, but on the other hand, they are considered social organisations that must fulfil their social commitments.

• Other Issues in Indian Railways

The Indian railways are filled with various concerns. Some of them are; late trains, lack of passenger facilities, including cleanliness at railway stations; a lack of security arrangements on the railways, which leads to robbery and dacoities; and so on. Political pressure and intervention are among the major issues in Indian railways, and several uneconomically viable initiatives have been begun for political reasons.

Measures Taken by the Government

• Combining the railway and general budgets.
• For clearing traffic jams and improving passenger and freight train punctuality
• luring private capital.
• Strategies for reducing carbon footprint through energy conservation
• Raftaar’s Mission
• About 400 main railway stations are being redeveloped.
• The government has partnered with Deloitte to reduce railway employee strength to keep the operating ratio in check.
• The Ministry of Railways’ “Special Freight Train Operations Scheme”  allowing private enterprises to run freight trains from their private terminals may result in speedier cargo evacuation.

Conclusion

India Railways is the world’s largest public-sector enterprise. It provides multiple services for customers in the Madras Zone. Net Reservation, Central Railway Reservation System, Unreserved Ticket System, Passenger Reservation System Enquiry by Internet, Tourism Services, and E-Working System are some of them. It also gives adequate drinking water, a neat compartment, safety, and a pantry in transit. It is concluded that the railway is an important mode of transportation in India. It transports lakhs of passengers at a time over large distances, who must be satisfied with the service provided by the Indian Railways.