Railway Budget 2015: Rail map for a major transformation

India's ascent to a high sustainable growth path over the next couple of decades is highly dependent on the expansion and modernisation of its transport network. The Indian Railways must form the centrepiece of the next phase of such transport development.

Indian Railways need a capacity enhancement that is far beyond its existing structure and technical capacity. We need to announce a major transformation of the railways now so that we set the conditions under which different kinds of investments can come in. Hence it needs to be corporatised and its technical capacity upgraded in every sphere. This will bring in the energies that can set it on a robust path to growth.

1. Push for big projects:

Announce a clear programme of capacity enhancement for the next 10-20 years similar to the kind of long term programmes initiated by the NDA on roads in 2000 in the form of the National Highways Development Project (NHDP) and the Pradhan Mantri Gram Sadak Yojana (PMGSY). These investment programmes are still going on, hence the 20 year perspective.

2. Enhance investment:

Increase railway investment from the current 0.4-0.5 per cent of GDP to about one per cent plus over the next three-five years, and then maintain this level over the following 15 years or so.

 The centrepiece of this programme should be:

• Accelerated investment in the Dedicated Freight Corridors (DFC) to complete the Golden Quadrilateral of DFCs in 15 years; the Eastern and Western Corridors in five years, and the others in the following 10.
• Accelerated investment in feeder lines from coal mining areas to the DFCs and ports.
• A comprehensive programme for renewal and modernisation of rolling stock, both freight wagons and passenger coaches over ten years.
• Technological modernisation of track and signalling.
• Commitment to increase the average speed of passenger trains on the golden quadrilateral to 150-200 kmph, as the DFCs are rolled out and the existing track is freed of freight trains, and is modernised.

3. Switch to company accounts format:

Transformation of the Railways accounts to Company accounts format within one year. (This was agreed in principle by the Railways in 2001-02 or thereabouts, but they have been dragging their feet). This is necessary as a precondition for corporatisation of the Railways.

4. Corporatise Indian Railways:

Set up the Indian Railways Corporation (IRC) as a statutory company in the form of a holding company. Bring all the existing railways companies (e.g. IRFC, Konkan Railway, DFCCIL, CONCOR, etc) into the IRC fold as subsidiaries. Corporatise all manufacturing units as independent companies, again as subsidiaries of the IRC. Begin the process of corporatising the railways into business oriented units such as passenger business, freight, and infrastructure. And progressively fold them into IRC as subsidiaries.5. Upgrade technical capacity and research and development:Expand and upgrade the technical capacity of railways staff at all levels to enable such expansion and modernisation. Set up a new research and development network including a new apex railways research institute.

6. Consult staff:

Initiate consultation with railways staff at all levels so that these changes are not seen to be threatening. With the kind of capacity expansion proposed, railways jobs will only increase, but not as government servants.