Bibek Debroy Committee’s Vision for Indian Railways

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Bibek Debroy Committee’s Vision for Indian Railways

Context:

Bibek Debroy, who passed away late last week, had a deep interest in the Indian Railways, which he expressed through both his 2015 reform report and a series of limericks. The Debroy Committee, led by him, outlined a roadmap to make Indian Railways more economically viable and competitive. While some of the committee’s suggestions have been adopted, many remain a work in progress.

Bibek Debroy Committee’s Vision for Indian Railways:

  • In 2015, the Bibek Debroy Committee, led by the late economist Bibek Debroy, laid out a comprehensive reform plan to revitalise Indian Railways, targeting financial sustainability and improved competitiveness. 
  • The committee’s report, titled The Committee for Mobilization of Resources for Major Railway Projects and Restructuring of Railway Ministry and Railway Board, proposed changes across decision-making, resource allocation, and management structure. 
  • The emphasis was on empowering railway officers, enhancing accountability, and selectively liberalising operations without full privatisation. Here’s a look at the key recommendations, their current status, and Debroy’s legacy.

Key Recommendations Implemented:

  • Empowering Railway Officers
    • Recommendation: Decentralise decision-making, giving more authority to General Managers (GMs), Divisional Railway Managers (DRMs), and branch officers to improve efficiency.
    • Status: Partially implemented, with GMs and DRMs now holding more decision-making power.
  • Redesignating Leadership Roles
    • Recommendation: Transform the Chairman of the Railway Board into a Chief Executive Officer (CEO), aligning the Railway Board with a corporate governance model for more streamlined accountability.
    • Status: Implemented in 2020, with the first CEO appointed, granting the position final decision-making authority.
  • Accounting System Overhaul
    • Recommendation: Shift from cash-based to accrual-based accounting to improve financial transparency.
    • Status: Initiated in 2017, with accrual-based accounting being adopted alongside the traditional cash-based system.
  • Rail Development Authority (RDA)
    • Recommendation: Establish an independent regulator to oversee competition, pricing, and revenue enhancement.
    • Status: The Rail Development Authority (RDA) was constituted in 2017, providing advisory support for pricing and competition but with limited regulatory powers.
  • Safety Fund – Rashtriya Rail Sanraksha Kosh (RRSK)
    • Recommendation: Create a dedicated safety fund to upgrade and maintain critical safety assets.
    • Status: Implemented in 2017 with an initial Rs. 1 lakh crore allocation, extended with an additional Rs 45,000 crore for the next five years.
  • Skill Development and Technological Integration
    • Recommendation: Focus on developing specialised skills and modernising technology in the Railways.
    • Status: Initiatives like Gati Shakti Vishwavidyalaya and technological upgrades, such as KAVACH safety systems and Vande Bharat trains, have been introduced, aligning with this vision.

Recommendations Partially Implemented: 

  • Decentralisation and Independent Divisions
    • Recommendation: Treat divisions as independent business units, giving DRMs authority over local operations and tenders.
    • Status: Progress has been made, but full decentralisation remains ongoing.
  • Offloading Non-Core Services
    • Recommendation: Reduce financial burden by offloading non-core services like Railway Protection Force (RPF) security and employee medical and educational facilities.
    • Status: Under government review; no final decision has been made.
  • Performance Assessment System
    • Recommendation: Create a transparent, objective system for assessing railway performance.
    • Status: Under examination, with no specific implementation measures introduced yet.

The Bibek Debroy committee recommended reforms for railways . The Indian railways should be separated into two: 

  • Railway Infrastructure Corporation( RIC)
  • Indian Railway Trains( IRTs) 

On the railway infrastructure provided by RIC , government trains (IRTs) and private trains both will run and they will have to pay charges to RIC . ( Operations done by Government)

Key Recommendations Rejected: 

  • Liberalisation of Indian Railways
    • Recommendation: Allow entry of private (domestic and foreign) operators to boost competition and service quality, without fully privatising passenger services.
    • Status: Not accepted due to opposition from unions and political concerns over passenger services. 
  • The government retains control over passenger operations, although limited Public-Private Partnership (PPP) projects exist in the freight sector.
  • Independent Regulator with Broader Powers
    • Recommendation: Establish an independent regulatory body with comprehensive powers to govern railway competition and pricing.
  • Status: While the RDA was formed, it holds limited powers compared to the independent regulator envisioned by the committee.
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