Piyush Goyal is new railway minister

Piyush Goyal, who has a background in accounts and law, has been made railway minister in the third cabinet reshuffle following his performance as power minister

Jyotika Sood

Piyush Goyal replaces Suresh Prabhu who had offered to resign after a spate of train accidents in the last month. Photo: PTI

New Delhi: The Union Cabinet on Sunday appointed Piyush Goyal as the new railway minister. Goyal, who took charge from Suresh Prabhu, will be the third railway minister of the Modi government. Its an appointment that reinforces the focus on infrastructure development, of which the railways accounts for a big chunk.

Goyal, who has a background in accounts and law, has been given the responsibility in the third reshuffle following his performance as power minister. He initiated several projects like electrification of villages, Ujwal DISCOM Assurance Yojana (UDAY) to revive debt- ridden power distribution companires (DISCOMS) and solar power.

Railways will be the third portfolio for Goyal, who has been minister of state with independent charge for power, coal, new and renewable energy and mines. Under the new appointments he will be minister of railways and coal.

Prabhu offered to quit on 23 August following two train derailments in span of four days, taking moral responsibility for the accidents. Prabhu who took over in November 2014 as railway minister leaves a legacy of reform and innovation, including switching to actuarial accounting, restructuring of manpower, cost cutting, increasing non-fare revenue, monetization of assets and increasing train speeds.

Indian Railways is the country’s largest employer with 1.4 million personnel. Its network straddles 66,030 km of track and ferries 23 million passengers and three million tonnes of freight daily. It operates 10,773 locomotives, 63,046 coaches and 245,000 wagons.

The big question is whether Goyal will continue with reforms in Prabhu’s mould or switch to his own methods and techniques to turn around the national carrier. The five priorities for Indian Railways are:

1. Increase Revenue and reduce expenditure: Indian Railways is under severe a funding crunch due to increasing expenditure and dwindling revenue. The challenge would be to explore non-fare revenue resources and asset monetization as the government doesn’t seem to like the idea of a hike in passenger fares.

2. Restructure manpower: Railways has manpower of around 1.4 million and still follows the old British practice of work distribution and hierarchy which needs reforms. Restructuring manpower is needed to bring down the expenses as a major chunk of its capex goes into salaries and pensions.

3. Increase train speed: The average passenger train speed is still around 40-50 km/hr while for freight its just 30-40 km/hour. This needs a complete turnaround. Prabhu introduced semi-high-speed train like Gatimaan Express but couldn’t replicate the model to other trains. Another high-speed train project, popularly known as the Bullet train from Ahmedabad to Mumbai, is a prestige project for the government. However, its execution during the current tenure of the government will be a challenge.

4. Reduce accidents: On an average, Indian Railways sees an accident every three days which remains a major criticism of Indian Railways. Worse, six of these 10 rail accidents are due to the mistakes or negligence of railway staff. The new minister would require ensuring safety issues are address at priority.

5. Station re-development: Station re-development is one of the pet-projects of the Modi government -- something the government wants to showcase as an achievement before its tenure comes to an end. At present, work has kicked off at just two stations – Habibganj and Gandhinagar, while 23 are in pipeline. In all, the government has proposed to redevelop 400 A1 and A class railway stations.