Research and Publications
Indian Railways in the Past Twenty Years
Issues, Performance and Challenges
The Indian Railways (IR), more than 150 years old, is among one of the largest and oldestrailway systems in the world. It has an extensive network, and played an integrating role in thesocial and economic development of the country. IR is a principal mode of transportation forlong haul freight movement in bulk, long distance passenger traffic, and mass rapid transit insuburban areas. It occupies a unique position in the socio-economic map of the country and isconsidered as a vehicle and a barometer of growth. It is also the biggest state owned enterprisein India, and contributes about 1% of India’s GNP.
The objectives of this paper are
strategic assessment of rail sub-sector from 1987 to the present
focus on the trends in sub-sector performance and key issues for the period, includingconsideration of changing public and private roles.
The IR System
IR is state owned and operated under Ministry of Railways (MOR), Government of India(GOI). IR’s finances were separated from the general exchequer in 1924 based on AckworthCommittee report and its annual requirement for funds is voted through a separate budgetpresented to the Indian parliament.The MOR functions under the guidelines of Minister for Railways assisted by Minister of Statefor Railways. The policy formation and management of Indian Railway Board comprises of Chairman and six functional members (Exhibit 1). Wide powers are vested in the Board toeffectively supervise the running of 16 zonal railways, metro railway (Calcutta), productionunits, construction organization and other rail establishments. These are generally headed byGeneral Managers. 12 subsidiary organizations under the MOR namely CONCOR, CRIS,DFCCIL, IRCON, IRCTC, IRFC, KRC, MRVC, RCIL, RITES, RLDA, and RVNL undertakespecialized jobs contributing to IR’s growth and progress. IRCON and RITES have theirbusiness abroad also.IR is a vertically integrated organization controlling its own facilities, performing all operatingand administrative functions and unilaterally determining what services to provide. In additionto carrying out the core business of rail transport, IR also owns and manages activities such asdesign and manufacture of rolling stock, overhaul and remanufacture of rolling stock,construction projects, schools, technical institutes, housing, hospitals, hotels etc. IR supports awork force of about 1.4 million constituting 5% of the 27 million people employed in theorganized sector. They are governed by central government rules for salary and otherconditions of service. Another 0.7 million employees are supported indirectly throughestablishments servicing IR.
This paper was prepared as inputs for the ADB study titled “Selected Evaluation Studies for 2005:SAPE for the Transport Sector in India.” We thank ADB for the support provided.
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W.P. No. 2008-07-05