Sunday, March 20, 2016

Government must remove impediments and collaborate with private sector to provide efficient and reliable transportation.

The Railways Reforms and Governance conclave organised by Governance Now held in New Delhi on 18th March, 2016 highlighted key issues in Railways and the future journey of reforms.

Union minister of railways, Suresh Prabhu spoke about how the economy of India is to be driven by the transport sector, and within that, Railways is going to be the driving force.

Governance is not just something to be read in books, rather it is something to be felt and experienced by people by improving the public service delivery.

The Railway Budget, also in the recent years, has shifted from announcing many new trains to improving the customer experience by announcing initiatives like Wi-Fi trains and stations, lower seats to be reserved for senior citizens, braille-enabled instructions, bio-toilets, e-catering etc. The insurance option was also announced in the Budget to improve the financial cover in rail travel. He also said how prompt the ministry has become in addressing issues coming through social media and tweets.

Dr Bibek Debroy, member of NITI Aayog and chairman of high level committee for railway restructuring highlighted the points, which were given as recommendation by the committee in 2015. Some of which are:

1. Commercial accounting

It should be clear in accounting that what will be the rate of return by investment in a project. It will not only attract private investment but also necessary for its economic viability.

2. Independent Regulator

To recommend the fair revision.

3. Decentralisation

From ministry and board to general manager and further to station superintendent.

4. Separation of core and non-core activities of Railways

Limiting Railways to the operation of trains rather than involvement in maintenance of schools and hospitals, as is the case presently.

5. Entry of private players

The whole train may not be run by a private player but a few coaches could be maintained.

Focusing on Railways is is definitely going to be helpful. Firstly, it is a more efficient means of transportation than roadways, thereby making it cost-effective. Secondly, it also results in lesser emission than roadways, making it comparitively eco-friendly.

Also, better rail transportation can result into decongestion of roadways. Furthermore, efficient Railways promotes industrial agglomeration providing spillover benefits to economy. For example, alongwith Delhi-Mumbai Dedicated Freight Corridor, DMIC (Delhi Mumbai Industrial Corridor) is to come up. Further it also provides forward and backward linkages to industry.

Railways is also considered as the lifeline of poor as it provides a cheap mode of transportation, thereby having social linkage as well. It can also help India to strengthen its internal security by expanding to Northeast and border areas. Well-connected border areas are of utmost importance to strengthen our military might, as can be seen in China.

Cross-country trains can have immense benefits for trade. So we need to build rail infrastructure across Bangladesh to Northeast and further to southeast Asian countries. China has already showcased it the process by running a train from China to Iran. It could gain a lot economically.

Railways can also be used in diplomacy, and also strategically. China's move of starting a train to Iran is to give shape to its "One Belt, One Road" initiative, which has both economic and strategic objectives. India could do the same by expanding to southeast Asian countries.

However there are a myriad of issues affecting Railways. These include limited expansion, same track for both passenger and freight trains, low speed of trains, rail safety, corruption and cross subsidisation of passenger fare by increasing freight rates etc. India already has very high rail freight rate which shifts the freight from rails to roads resulting into further losses.

Rationalisation of fare is required to give sufficient capital to railways to go for expansion. However it remains a political decision, as the interest of poor people should also not be sidelined. Moreover India can learn from world leaders in railways like Japan and China. We can gain a lot from China in fields of high-speed rail and heavy haul. Both Japan and China are also establishing railway universities.

The time has come for the government to remove various impediments by showing political will and collaborate with private sector to provide efficient, safe, reliable railway transportation which not only takes economic growth to next level but also serves the wheel of poor as well


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