Railway Reform: Bhadralok Debroy Wrestles A Croc

The Debroy Committee Report is a thinly veiled manifesto aimed at decentralisation, unbundling, hiving off and unabashed privatisation in parts. It bites the bullet and makes very specific suggestions.

To friends of Crocodile Dundee, the tie-me-kangaroo-down Australian outback movie from three decades ago, ‘wrestling a croc’ is just good manly sport.

You catch a firm hold and try not to be knocked senseless by its long and formidable tail. And then there’s the added frisson of sawed-off danger. That of losing a limb, or more, to its extremely toothy pair of jaws.

To those of us who are not aspiring C. Dundees, this would be a pointless wrestling match indeed, particularly with a disgruntled crocodile looking for lunch. Besides, such field tests of manhood are not an Indian thing, even though the ghariyal, and several crafty cousins, are as plentiful and abundant in the rivers of India, as in the Australian outback.

But we sub-continentals like to choose our own battles too. That an unassuming bhadralok sort, a meritorious, eminent economist, should undertake to lay the groundwork for a momentous one, is not, on balance, very surprising. Renaissance man that he is, Bibek Debroy has recently completed a lucid and unabridged 10-volume rendition of The Mahabharata that must have taught him a thing or two.

And now, his Railway Reforms Report is to be the basis of a formidable joust with the status quoists, the railway trade unions, contractors, suppliers, other vested interests, all of whom are soon expected to crawl out of the woodwork in opposition.

But this report will be used, with the proper political determination behind it, with a view to restore the Indian Railways, to efficiency and financial health. It is designed to unlock its potential, and bring about unprecedented modernisation in the nick of time. Prime Minister Narendra Modi also expects this reformation of the Indian Railways to contribute significantly to India’s economic turnaround, its employment objectives, and its GDP.

Of course, the Debroy document, previewed in interim form in March already, is only a report, like many others that have been commissioned by the Government of India over the years, and for a variety of reasons.

This one is different though, not only in its strongly reformist suggestions, but because it was commissioned by the Prime Minister himself, and as recently as last September. Modi intends to use the Debroy Report as a starting point to revamp, reform, restore and transform the Indian Railways. A dynamic Union Minister, Suresh Prabhu, has already been put in place for the purpose, and will do his part, both to raise investment, and to overcome huge inbuilt bureaucratic resistance to change.

Debroy has the erudition, the boldness, and the zeal; and his committee/ panel is packed with eminences: a former Cabinet Secretary, a senior think-tank man, the well-known corporate honcho turned pro-reform writer Gurcharan Das, a retired National Stock Exchange MD, and an erstwhile Financial Commissioner from the Indian Railways itself.

But of course, not everyone at the receiving end is predisposed to agree with the Report’s thrust. The Railway Board, for example, is straining to prevent Debroy’s Report, ready since April this year, from being presented formally, at least till the end of June.

The powerful and highly centralised Railway Board is said to be less than enthused about the Report’s suggestions that it be turned into a macro-level advisory, with all of its executive authority pushed down to much lower operational levels.

The Report meanwhile, has been leaking profusely into various media outlets, ever since it was made ready, and a series of wondrous pieces on it, describing a very different architecture from the impenetrable monolith we have been used to so far. This more so, because it was preordained by the Modi administration.

The Debroy Committee Report is a thinly veiled manifesto, its stridency in the interim report, diluted diplomatically in the final one, aimed at decentralisation, unbundling, hiving off and unabashed privatisation in parts.

It is bolder than most such documents because it bites the bullet and makes specific suggestions. It dwells on how to generate better revenues, mainly by overhauling the freight handling capacities of the behemoth.

It wants the Railway Budget merged with the Union Budget, within about five years, and the passenger fare subsidies to be borne by the Union and State Governments as applicable, for inter-state and local applications, in a budgeted and transparent manner. The implication is the cross-subsidisation of passenger fares by freight is dragging down the entire enterprise, particularly in the absence of adequate capacity to handle more freight, losing it therefore to the more expensive but plentiful road transportation.

This proposed separation of subsidies will free the Railway finances from its non-standard formats of accounting, and make it far more attractive to potential investors from abroad and the private sector.

The report also calls repeatedly for extensive modernisation of track, rolling stock, and station, of signalling equipment, of accounting practices, of administration. It wants recruitment practices streamlined and standardised, private sector and specialised talent accessed as necessary, monetisation of assets like stations after they are upgraded first, professional catering, outsourced security, and so on.

That the Railway administration is absolutely byzantine at present is, of course, more by deliberate design, than by any professional ineptitude or inefficiency. But it needs shaking up, because the Indian Railways have become unwieldy and unviable as it is.

The Railways are India’s biggest employers, but yet is chronically inefficient. It runs hospitals, schools, owns immense tracts of real estate. It moves over 23 million passengers per day, and 3 million tonnes of freight alongside. And this, over a 64,460 km. network.

It is the 4^th largest railway system in the world, but still well behind the biggest, that is nearly four times larger, and privately run to boot. The American network criss-crosses that enormous country with 224,792 km of track. It is not for nothing that the American freight train is so much a part of its culture and folklore. And it is freight that can produce the greenfield big bucks for the Indian Railways too, as the Debroy Report has identified.

The State runs the Russian railway system with 128,000 km. and China with 103,144 km. of track, just as it does in India. But now, there is a compelling case, both because of the huge investments involved and a need for efficiency that the private sector/foreign investment is brought in. This is also just so in defence production, and all the ‘Make in India’ initiatives.

After all, only these same four nations carry over 1 billion tonnes of freight per annum. India however, is carrying much less than it potentially could, only because it does not have the facilities like dedicated freight corridors, and better quality, faster trains, with the capacity, availability, and the material handling systems that it badly needs.

Where do Bullet trains fit into all this? Well, let us realise just how many people can be accommodated in an aircraft, in a populous, ever growing country, and you have the answer. The future beckons, and the Indian Railways will not be found wanting, if Debroy and Modi can help it.