Last December, India’s cabinet sanctioned the merger of eight existing railway services into a single Indian Railway Management Service (IRMS), while the eight member railway board was reduced to four members and a chairman. Since then, IR’s 20,000 “Group-A” service officers have faced uncertainty over future salary or promotion prospects. This has resulted in a number of representations and threats of legal action.
While services have been merged and the composition of the railway board has been altered, the challenging task of integrating staff at a zonal and divisional level remains, a plan that a number of officers think will be difficult to achieve, at least in the short run.
Railways minister, Mr Piyush Goyal, has pushed ahead with plans that include the elimination of a “quota system” for promotion to key positions such as divisional railway manager or general manager. According to the new proposal, officers will now be elevated on merit, as decided by a search and select committee.
After recording a 97.6% operating ratio in the last fiscal year, IR’s finances continued to dwindle following the decision to suspend passenger services on March 25 due to the Covid-19 pandemic. Freight services have continued to operate, but have suffered from an overall economic slump.
While Yadav has refrained from giving a timeline on restarting passenger services, IR officials say the suspension of services is providing the cash-strapped organisation an opportunity to cut losses. IR’s passenger operation suffers an estimated annual loss of Rs 400bn ($US 5.4bn), with this cross-subsidised by revenue from freight operations.
The restructuring is seen as a forerunner for the privatisation of the railways through the offloading of stakes in IR’s subsidiaries such as the Container Corporation, Indian Railways Catering and Tourism Corporation and the Rail India Technical and Economic Services.
While global bids for private operators to run 150 passenger services on 100 routes were refloated last month, Yadav has also announced plans to permit private operators to run freight services on the Eastern and Western Dedicated Freight Corridors after they open in June 2022.
The restructuring is in line with the recommendations of several expert committees.
“It is a long pending and a welcome move, although the smooth implementation of the plan will be a challenge,” says former Railway Board chairman, Mr J P Batra.
“If the restructuring plan enables IR to develop a business focus and a customer friendly approach, it is a welcome step,” says former Railway Board member, Mr Subodh Jain. “But the implementation process needs to be transparent and fair in order to enable the success of the plan.”