Debroy committee charted the Railways' path towards competitiveness, but most recommendations still work-in-progress

• The landmark report of the 2015 expert committee on Railway Reforms, headed by the late economist Bibek Debroy, did clear the decks for a complete overhaul of the national transporter to achieve economic viability.

Highlights:

• The 2015 Railway Reforms report, led by economist Bibek Debroy, laid out a transformative plan for the Indian Railways. The committee’s recommendations focused on improving efficiency, financial transparency, and decision-making authority within the system, with some key proposals already implemented.

Key Recommendations and Actions:

• Decentralization and Empowerment: The committee emphasized empowering General Managers (GMs) and Divisional Railway Managers (DRMs) to make decisions independently. This recommendation has been largely implemented, enabling these officers to handle a wider scope of responsibilities and manage tenders locally.
• Chairman as CEO: To streamline decision-making, the committee recommended that the Railway Board’s Chairman be re-designated as CEO, with full authority to make final decisions. This was adopted, with the first Chairman and CEO appointed in September 2020.
• Accrual-Based Accounting: An overhaul of the railway’s accounting system was proposed, recommending a shift to accrual-based accounting for better financial clarity. This reform has since been introduced, with the Ministry of Railways adopting accrual accounting alongside the existing cash-based system.
• Independent Regulator: The report called for a Rail Development Authority (RDA) to regulate prices, promote competition, and offer advisory services. Established in 2017, the RDA now provides expert input on service pricing and non-fare revenue opportunities.
• Safety Initiatives: Responding to the need for safer rail operations, the government established the Rashtriya Rail Sanraksha Kosh (RRSK) with an initial ₹1 lakh crore corpus in 2017 for critical safety upgrades. This fund was extended in 2022–23 with additional budget support.
• Offloading Non-Core Services: The report advised that the Railways reduce its engagement in non-core activities like security, education, and healthcare services for employees. This recommendation is still under consideration by the government.

Liberalization, Not Privatization:

• While the committee recommended “liberalization” to allow new operators in the rail sector, this was distinctly different from privatization. It proposed a regulated entry of private players to enhance competition and services while maintaining government oversight. Due to opposition from railway unions and political resistance, however, this aspect remains on hold.

Challenges and Considerations:

• The Indian Railways faces challenges with balancing passenger services and financial sustainability. A ministry official noted that government support is essential to maintain passenger service quality, even as privatization is cautiously applied in the goods sector. The government continues to explore options for public-private partnerships (PPP) without shifting fully to a privatized model.

Prelims Takeaways

• KAVACH system
• Rail Development Authority (RDA)
• Rashtriya Rail Sanraksha Kosh’ (RRSK)