Indian Railways: Wasted opportunity?

A couple of days ago, we had another railway budget. As expected, the monister had no clue how to prioritize things for the railways. It looked like a tamasha. Like a Raja giving away dole to his constituents. In this case, the constituents happened to be the state going to the polls which included the railway minister's home state as well. How long this tamasha should go on? Shouldn't there be an end to all this very soon? In fact, Railways is also one of the important pieces of the infrastructure puzzle which is very much essential to achieve the 9% growth that we everyone is talking about.

To understand the mess that the railways is in, let us atke some examples. Every year, more passenger trains are introduced in the northern & eastern sectors and not southers & western. It is a known fact that less than 10% people buy ticket in the sectors which Railways is prioritizing whereas in sectors which are not getting any attention, most people buy tickets and exceptions are few and far in-between. For example, in Karnataka, there is so much traffic between Bangalore-Mysore, Bangalore-Hubli & Bangalore-Mangalore sectors. If I was running railways, I would have laid 3-4 lines in these sectors and run superfast trains. But, the reality is that each of these sectors have only one railways line built very long ago. I would have built a lot of lines from various mineral ruch areas of Karnataka to Mangalore port to cash-in on the freight traffic.

What needs to be done so that Indian Railways can not only be run efficiently, but also stop its dependency on the government? To start with, it should be converted into a corporation, like SBI or BHEL and allow it to be run by a professional like Sreedharan who is running DMRC. This would ensure that the finances of Railways becomes more transparent and we would atleast know where it stands in terms of its assets & liabilities. Otherwise, it will be Mamatha's word against Laloo's. Someone like Sreedharan who knows how railways works can work out a suitable corporate structure for railways. He may need external help, but this needs to be the first step.

After Railways becomes a corporation with its own CEO & board of directors, the government can slowly start diversting its equity like it did for other PSU's and ultimately make it a completely professional run corporation like L&T. Since Railways operates in a space where having more than one corporation does not make sense, we cannot allow private operators. We just need to ensure that the existing corporation is run efficiently without any government interference. Competition with Airlines & road transport will make it more efficient in the long run, but only if it is not under government clutches.

In summary, Railways needs to come out of government clutches for it be a real partner in the India growth story. Otherwise, its contribution will be as dismal as Air India.