Large organisations are rarely restructured. If they are government or public-owned, restructuring is even rarer. The magnitude of the recent revamp of Indian Railways (IR) needs to be appreciated in this context. It is effectively an attempt to overhaul a government institution that is more than 1.3 million peoplestrong and 160-plus years old. So, why is such a mega restructuring being attempted? How will this benefit the railways and its stakeholders?
The Railway Board is IR’s apex decision-making body. It is organised into various departments like mechanical, electrical, traffic and finance that are vertically separated from the top to bottom. A member of the board, usually a secretary rank officer, heads each department. The management and administrative arm of the organisation is staffed by officers belonging to eight Group A services of IR that include Indian Railway Traffic Service (IRTS), Indian Railway Service of Engineers (IRSE), Indian Railway Service of Mechanical Engineers (IRSME), etc.
Officers from a particular service are likely to grow within their respective departments, exceptions being some general roles such as divisional railway manager (DRM), and general manager (GM).
These lines of separation made IR a complex over-departmentalised organisation with inefficient decision-making. Several expert committees in the past flagged their serious concerns on this matter including, most recently, the one headed by one of us, the Bibek Debroy Committee.
It highlighted the gravity of the problem, ‘[Departmentalism] manifests itself in the form of unhealthy competition among departments for appropriating a larger share of scarce resources; injurious competition for usurping a larger share of key general management posts for better access to power, authority etc; a clamour for pursuing narrow departmental goals at the cost of organisational goals and objectives; and a lack of team work and cohesion.’
GoI has set a vision of making railways a 100% safe, fast and reliable mode of transport for passengers and freight. The plan is to modernise the entire network by investing around Rs 50 lakh crore by 2030. But if IR continues to work as it does now — in narrow departmental silos — GoI will never be able to achieve this vision.
IR restructuring has two major components. The first involves unification of existing Group A services into a single service: the Indian Railway Management Service (IRMS). The second involves reorganising the Railway Board itself. This includes, one, organising the board along functional lines (infrastructure, operations and business development, rolling stock, and finance) with each function headed by a member. The chairman would continue to head the board, but may be redesignated as CEO.
Two, making the board leaner with the number of members reduced to four, heading the above-mentioned functions.
Three, flexibility to induct professionals with leadership experience in technical domains as independent board members. The merger of services will help IR transform itself into a unified entity capable of working efficiently as one team towards common goals. On the other hand, reorganisation of the board will orient IR’s decision-making set-up to market realities, and will infuse fresh thinking, thereby making IR more creative in responding to future business challenges.
That said, although the exact modalities of unification of services are still being worked out, GoI has already stated that due care will be taken to ensure that career progression, seniority, promotion and the technical/non-technical work focus of existing officers is not compromised.
IR leadership has already started engaging with existing railway officers and other stakeholders in this regard. In fact, even before considering these initiatives, wide consensus and support from officers across the railway services as well as their federations were obtained.
Effectively, these decisions are a bold attempt to overhaul the work culture of IR and align it to market forces. At this point of time, IR stands at a juncture where a series of earlier reforms have started showing initial results. The pace of capacity augmentation works such as doubling, tripling, electrification etc, has gone up significantly.
The entire broad gauge network is free of unmanned level crossings. Rolling stock, and signal and telegraph (S&T) technology are being modernised. With zero deaths, this financial year has been the safest in IR’s history. As IR embarks on its journey into the next decade, a restructured organisation should make it simple, agile and efficient, thereby giving it all the necessary tools and flexibilities to achieve ‘vision 2030’.
Debroy is chairman, Economic Advisory Council to the Prime Minister (EAC-PM), and Desai is former officer on special duty, EAC-PM