17 April 2016 10:42:08 IST

Partnership and research-led initiatives, the way forward

Investments should be used to improve infrastructure, passenger amenities, safety

The Railways has a natural monopoly on rail transport in India, both freight and passenger travel services. Liberalisation steered annual economic growth higher to touch a GDP rate of 6.5 per cent at present, but a similar advancement has not been reflected in the Indian Railways, where growth has been sluggish.

With increasing urbanisation, which has led to rising incomes and expansion of business the world over, passenger traffic has increased exponentially. However, investments have not kept pace. Traffic growth has underpinned management initiatives aimed at attaining steady and significant improvements in staff productivity and equipment utilisation. But the Railways has not been notably innovative, either in using technology , or in moving towards more commercial management structures; neither is it focused on service quality or market-responsiveness.

Here’s a snapshot, in numbers.

~ 21,598 trains

~ 23 million daily passengers

~ 7,112 stations

~ 8,636 freight trains

~ 3 million tonnes of freight each day

The Railway Budget 2016

In his Rail Budget 2016, Railway Minister Suresh Prabhu had said it has plans of doubling investment to ₹1.2 lakh crore for FY17, and Indian Railways envisages an investment of ₹8.5 lakh crore in the next five years.

Immediate Measures

So what can it do with the influx of funds? Here are some suggestions.

Audit Board : A railways audit board must be set up to closely investigate the services of each department, ranging from track maintenance and scrap disposal to services offered by employees, based on pre-defined parameters.

Passenger Traffic : The current handling capacity of Indian Railways, in terms of employees and services, is much lower than required. Now, with competition from the aviation sector, fares must be kept constant.

GPS tracking : To increase reliability and safety, GPS devices can be installed onboard the coaches to check real-time location of trains. This way, on-time arrival can be improved.

Mass transit : For trains with sitting coaches and chair cars, more double-decker coaches can be introduced to increase mass transit.

Current investment by government : Investment in the passenger segment should be utilised for critical amenities (see Graphic on KANO model) by adopting the Public Private Partnership route.

Partner with State Government : The State should be issued equity and made a partner for developing infrastructure at railway stations. This will help decentralise the process and promote involvement of the State.

Construct dedicated freight transport lines: This will ensure zero conflict between passenger and freight traffic.

Strengthen rail connectivity : Extend lines to reach various ports and mines. This would boost freight traffic.

Private Investment: Rece ntly, 100 per cent FDI has been allowed in the railway infrastructure segment. This has opened up opportunities for participation in projects such as

~ High-speed railways

~ Railway lines to and from coal mines and ports

~ Projects relating to electrification

~ High-speed tracks in suburban corridors

Freight services by Indian Railways must be auctioned to different private companies in various zones. This will increase operational efficiency in a competitive market.

Private investment in railway logistics will modernise these operations as logistic parks that provide for warehousing, packaging, distribution, door-to-door delivery and consignment tracking will be set up.


Maximum number of accidents occur due to human error. Hence, government must invest in research and development (R&D) for better techniques, safe design of coaches and railway station architecture. Improved training of railway employees (both soft and hard skills based on responsibilities) with systematic Human Resource Audits every quarter will also help.

Scrap disposal : E-auctioning of scrap generated each year by Indian Railways Stores service will help raise funds that can be used to invest in activities that create value.

Long Term Measures: R&D

Special Railway Establishment for Strategic Technology and Holistic Advancement or SRESHTA, that comprises mostly scientists and railway experts, can extend its R&D facilities and laboratories to enable the following:

~ Mass transit and high-speed train technology

~ More comfortable wagons

~ Solutions to improve safety and reduce accidents

~ Focus on non-conventional sources of energy for running trains (investment in R&D has a provision of tax deduction under Section 35 (2AA) of the Income-Tax Act).

~ Future engagement of private players in high-tech technology, to improve diagnostic capabilities and leverage existing resources better.

(The fourth runners up are first-year PGP students from IIM Indore)