Railways: Choice and Competition - XI

Is the Indian Railways over-staffed or wrongly-staffed? The Railways must identify its core areas and not get distracted by non-core activities. 

The standard caveat applies.

Most people I meet think IR (Indian Railways) is a bloated organization, with an excess of staff.  As with government in general, I think responses should be more nuanced.  The problem isn’t with overall staff per se, but with its composition.  The standard response is understandable.  After all, in 2012-13, the annual wage bill (this doesn’t include all expenses on staff) was Rs 67,005 crores.  Distributed over total staff strength of 1.307 million, that’s average annual wages of Rs 527,259.  Depending on what the new Pay Commission recommends, there will be another hit, both on wages and on pensions.  The overall staff strength isn’t as high as it used to be in the past.  The peak was in 1990-91, with strength of 1.652 million.

If you read a report that says there is over-staffing of 20%, check the year.  I don’t think it can be 20% today.  Depending on how you measure, there is bound to be over-staffing.  However, I think that a figure like 10% will be more realistic now.  As is customary within government, this staff is divided into Groups A, B, C and D.  A and B represent the management category, so to speak.  1.3% of the total staff strength is from A and B.  C and D represent the non-gazetted category.

Notice that A and B staff don’t only exist in the zonal railways.  The total A and B strength is 16,325.  Other than the zonal railways, they also exist in the production units and in Railway Board and other railway offices.  1,894 of them are in Railway Board and other railway offices.  I am not absolutely sure about this number.  But I think around 1,000 are in Rail Bhavan itself.

Notice also that in addition to pay and leave salary, the typical A and B category employee gets running allowance, overtime allowance, travelling allowance, DA, CA, PF, gratuity, pensions, hard duty allowance and productivity linked bonus.  That pattern is also mirrored for Groups C and D.  Typically D is the unskilled or semi-skilled category.  Ideally, you probably shouldn’t have the D category staff.  (Many of them are safaiwalahs.)  Indeed, over time, the C/D ratio has changed.  It used to be 25:75 in 1950-51.  Today, it is 93:07.  Having said this, the total number of D category staff is 25,376.  But notice that 3,000 of them are not in zones, but in production units.  Group C staff possesses some skills.  About 100,000 of them are involved in running the trains.  326,000 are technicians and supervisors, not directly involved with running the trains, but employed in zones and workshops.

Let us look at it another way, to drive home the point I want to make.  I have talked about the Railway Protection Force (RPF) and the Railway Protection Special Force (RPSF) earlier.  There are 65,000 of these.  While security on trains is an issue, I have also talked about the limited police powers RPF possesses and the contribution of 50% IR makes to the GRP (Government Railway Police), although IR has no control over GRP.  In addition, there are the State police.  State governments have been reluctant to grant police powers to RPF.  After all, law and order is a State subject.  RPF has duties to protect railway property, including on moving trains.  On a moving train, if everything is left to GRP, there will be issues about jurisdiction, about who should register the FIR and conduct further investigations.  I have discussed this with many people and several would like armed police to be there on trains, to ensure safety.  But the point is that this isn’t costless.  Per train/km it costs Rs 24.1 to have RP on trains.

As far as I can make out, Rs 2200 crores is spent every year to have RPF on trains, apart from Rs 460 crores spent on GRP.  What is IR’s core function?  Is it running trains, or is it policing functions, medical services and schools?  .

In a different category, there are the production units.  To get back to the point I made about staff composition earlier, one unfortunate development has been a shortage in staff for the core function of running trains, such as locomotive drivers, and an excess of appointments for RPF and medical.  There are better ways of handling security on trains.  There was a day and age when the Indian Railway Medical Service (IRMS) was necessary.  There are better ways of handling health needs now, even for medical emergencies on trains and in stations.  Do we need those 125 hospitals, 586 health units, 2,506 doctors and 54,000 paramedical staff to be part of the IR system?  Do we need IR to run 196 railway schools, with 3,032 teachers and 893 non-teaching staff?

That argument about IR concentrating on its core function is old hat.  The problem arises because we can’t figure out what is core.  I personally think the core is running trains.  Security, medical and education aren’t core.  Nor do production units represent the core.  Since we haven’t been able to resolve what is core, IR does everything inefficiently.  Once we agree, we can figure out what to do with existing staff.  VRS sounds attractive.  But my impression of VRS elsewhere is that it has had doubtful success.  Good people leave and the relatively inferior ones stay on.  There is certainly a process of natural attrition.  Appointments to government, and to IR, have never been evenly spread out over time.  They tend to be bunched.  Because of bunching, a large number of Groups C and D staff will retire in the next few years.  It shoots up to 57,000 in 2014-15, before beginning to decline to something like 53,000 in 2019-20.

There are contractual obligations, including pensions, for existing employees.  However, it is a different matter for new employees, for whom, new pension schemes can be devised.  For new employees, provided IR is restructured, it is also possible to think of different kinds of incentive payments, delinking the wage and salary structure from the present government system.  However, for all this to happen, we need to decide on what is core and what IR needs to focus on.