Bibek Debroy Committee on Reforms in Indian Railways
09-11-2024
10:36 AM
1 min read
What’s in today’s article?
- Introduction
- Key Recommendations of the Bibek Debroy Committee
- Implementation Status
- Conclusion
Introduction
- The Bibek Debroy Committee, formed in 2014, aimed at suggesting comprehensive reforms for the Indian Railways to improve operational efficiency, financial viability, and competitiveness.
- Chaired by renowned economist Bibek Debroy, the committee published its landmark report in 2015, proposing extensive changes to transform Indian Railways.
- The report highlighted issues across decision-making structures, financial management, human resources, and the need for liberalization within Indian Railways.
Key Recommendations of the Bibek Debroy Committee
- Empowerment of Railway Officers:
- The committee emphasized empowering field officers, including General Managers (GMs) and Divisional Railway Managers (DRMs), by granting them greater decision-making authority.
- The government has partially implemented this by empowering GMs and DRMs to make independent decisions, handle various tenders, and manage divisions as business units.
- Establishment of an Independent Regulator:
- A major recommendation was to set up an independent regulatory body to ensure fair competition and regulate pricing.
- The Rail Development Authority (RDA) was approved in 2017, intended to provide expert advice on service pricing, enhance non-fare revenue, and foster competition.
- Liberalization of Indian Railways:
- The committee recommended "liberalization," allowing private operators to participate in rail services to increase competitiveness and improve services.
- It clarified that liberalization does not imply "privatization" but aims at creating a competitive environment.
- However, due to opposition from railway unions and political parties, the government has not fully implemented this recommendation.
- Private participation is limited to select Public-Private Partnership (PPP) projects, primarily in freight services.
- Redesignation of Railway Board Chairman as CEO:
- To expedite decision-making, the committee recommended designating the Chairman of the Railway Board as Chief Executive Officer (CEO) with final decision-making authority.
- This was implemented in 2020, with the first Chairman and CEO of the Railway Board appointed, making the Board function more like a corporate entity.
- Offloading Non-Core Services:
- The committee suggested that Indian Railways focus on its core function of running trains, while outsourcing non-core services such as security (Railway Protection Force), medical, and educational facilities for employees.
- The government is considering this recommendation to reduce operational burdens and improve focus on core railway services.
- Reforms in Accounting System:
- A major overhaul of the accounting system was recommended to shift from cash-based accounting to accrual-based accounting, enhancing financial transparency.
- This recommendation was implemented through an Accounting Reforms project, with Indian Railways now preparing financial statements on both accrual and cash bases.
- Safety Measures and Rashtriya Rail Sanraksha Kosh (RRSK):
- In response to the committee's recommendations on safety, the Ministry of Railways created the Rashtriya Rail Sanraksha Kosh (RRSK) in 2017 with a fund of ₹1 lakh crore for replacing, renewing, and upgrading critical safety assets.
- In 2022-23, the government extended RRSK with an additional ₹45,000 crore in budgetary support.
- Integration of Advanced Technology:
- The committee recommended integrating advanced technology to modernize railway operations, including the adoption of high-speed trains like Vande Bharat and safety systems like KAVACH.
- The establishment of Gati Shakti Vishwavidyalaya for skill development and capacity building in rail technology aligns with this goal, focusing on empowering the workforce with modern skills.
Implementation Status
- Out of the 40 recommendations made by the committee:
- 19 were fully accepted, including the redesignation of the Railway Board Chairman as CEO, accounting reforms, and setting up RRSK.
- 7 were partially accepted, such as empowering DRMs and implementing decentralization at the division level.
- 14 recommendations were rejected, mainly due to opposition from unions or political considerations, especially regarding liberalization and private sector entry in passenger services.
Conclusion
- The Bibek Debroy Committee's recommendations laid the foundation for a modern, efficient, and financially sustainable Indian Railways.
- While several recommendations have been implemented, including structural changes, safety funds, and decentralization, others remain pending due to various challenges.
- The reforms introduced have made significant progress, yet the journey to fully modernize Indian Railways continues.
Q1. When was Railways introduced in India?
On 16th April 1853, the first passenger train ran between Bori Bunder (Bombay) and Thane, a distance of 34 km. It was operated by three locomotives, named Sahib, Sultan and Sindh, and had thirteen carriages.
Q2. When was Railways budget merged with the General Budget?
The Railway Budget was merged with the General Budget in 2017, after the government of India approved the merger in 2016.