The government has announced forming a committee to begin the much-needed process of restructuring the Railway Board. The committee, announced on Tuesday, will be headed by economist Bibek Debroy.
The other members are former Procter & Gamble India head Gurcharan Das, former National Stock Exchange chief Ravi Narain, former cabinet secretary K.M. Chandrashekhar, Partha Mukhopadhyay of the Centre for Policy Research, and Rajendra Kashyap, former Finance Commissioner of the Railways.
Headed by Arunendra Kumar, the six-member Railway Board handles policy formulation, implementation and funding requirement of the Indian Railways.
In his maiden Budget in July, Railway Minister Sadanand Gowda opened up the tightly controlled railways sector to foreign direct investment. While the new government hiked passenger and freight charges in June, Gowda had highlighted the need to overhaul the Railway Board.
"The Railway Board, due to overlapping roles of policy formulation and implementation, has become unwieldy. Therefore, I propose to separate these two functions," he had said in his Budget speech.
Besides reorganisation, the committee is expected to look at issues such as setting up of a Rail Tariff Authority, mergers of various departments, and financing. It is believed that the committee report will be submitted in a year. The role of the Rail Tariff Authority will be to develop an integrated and dynamic pricing mechanism for both passenger and freight segments.
It is also likely to advise the central government on fixation of tariff. Recently, Gowda had talked about periodic fuel price-linked passenger fare hike. Restructuring the board assumes significance given that the world's third-largest rail network is suffering a loss of Rs 900 crore per month on the passenger segment alone.
To revive the ailing railways, several attempts have been made in the past too. In 1994, the Prakash Tandon committee recommended moving away from the departmentalization of the railways. The Rakesh Mohan committee in 2001 stressed on a fresh financing plan to make the railways commercially viable.
It was followed by the Sam Pitroda committee report in 2012 that pegged the total cost of railways modernisation at Rs 5.6 trillion. Going by the current situation of the railways, none of these recommendations seems to have been implemented - either entirely or partially. Given the poor track record of implementing the committee reports, one can only hope that the new government can withstand the challenges and make a bold move of putting the railways back on track.