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Hema Ramakrishnan
Harish Damodaran

`I can recommend what I like, but then I am not responsible to the public. For a Minister to actually implement these reform measures calls for conviction and concern for the larger interests of the Railways.'

NEW DELHI, Feb. 27

A DAY after Mr Nitish Kumar presented a strikingly reformist Railway Budget in Parliament, involving a comprehensive rebalancing of passenger tariffs and rationalisation of freight rates, Business Line elicited the views of Dr Rakesh Mohan, currently Economic Advisor to the Finance Minister and Chairperson of the Expert Group which prepared the basic blue-print for undertaking these measures.

What is your reaction to the Railway Budget?

I must say that the Railway Minister, Mr Nitish Kumar, has undertaken a bold and progressive tariff rebalancing exercise in freight and passenger fares. It is not at all easy to undertake this kind of changes in the fare structure, particularly for the second class and sleeper segments. Mr Nitish Kumar must be complimented for having had the courage and conviction to do so.

But Mr Nitish Kumar seems to have gone beyond even the passenger fare increases recommended by your report...

Well, given that passenger tariffs were not raised in the last two years, a lot of catching up had to be done. And, that is why Mr Nitish Kumar has to be complimented for undertaking probably the most progressive tariff rebalancing exercise in the last many years.

I can recommend what I like, but then I am not responsible to the public. For a Minister, who is close to the grassroots, to actually implement these reform measures calls for conviction and concern for the larger interests of the Railways.

But the Minister does not seem to have done much on your other recommendations, particularly those pertaining to the organisational restructuring of the Railways.

The primary concern of our group was to make the Railways a financially viable organisation that is responsive to changing market conditions and needs. This is obviously not possible without undertaking a thorough restructuring of tariffs.

As regards the organisational restructuring, our group only gave a certain view on how this could be done. If there is an easier way of accomplishing the ultimate goal, so be it. We are much more concerned about the final outcome than the inputs going into it.

The measures announced by Mr Nitish Kumar definitely signals the fact that the first stage of tariff restructuring is underway. What is creditable is that the Minister has shown resolve in dealing with the public and Parliament. It remains to be seen whether he can do the same thing with the organisation itself. Here, my own perception is that it is the senior bureaucracy of the Railways that is resistant to organisational changes. The labour unions seem much more receptive because, after all, it is in their interest to make the Railways a commercially viable entity. Also, they have to be concerned about their own employment security.

So, you believe that the current focus should be more on making the Railways an efficient public sector organisation, rather than looking at the privatisation or corporatisation options...

Our group never recommended privatisation in the first place. Even on corporatisation, we were clear that it could be done only in the medium-term over the next five years. But even within the Railways itself, look at PSUs such as Concor, IRFC, Ircon and Rites, which are all success stories of corporatisation. All of them are profit-making and pay regular dividends.

Why can't the experience gained from these PSUs be extended to the Railways' other operations as well? Why cannot there be, say an independent `Pascor' that would run the Shatabdi or Rajdhani trains more profitably?

Similarly, there is every need for the Railways to have a corporate accounting structure, so that you know precisely what and how much are the social costs incurred by it. The current system does not give out these figures clearly.

And finally, look at the tenure of the Railway Board Chairman. There have been three of them in the last three years! How can you expect a long-term vision to emerge in such circumstances? Those heading public sector banks today enjoy longer tenures, which helps them to plan and run their organisations better.

What is your response to the introduction of the 16 new Jan Shatabdi inter city trains?

I do not know how many of the new trains are economically or commercially viable. But again the point is the Railways is responding to changes in consumer demand and offer a wide menu of travelling options for the passenger to choose from.

Earlier, there were no intermediate classes between second-class sleeper and AC-2 tier. Now we have the AC-3 Tier as well (which will contribute close to Rs 1,500 crore to the Railways in the coming fiscal). There are many passengers who find upper class travel unaffordable, while at the same time cannot bear the discomfort of commuting in lower classes. If the Railways can address the needs of these intermediate segments, it can end up mobilising much higher revenues. In that sense, the introduction of Jan Shatabdis (which will have non-AC chair cars in Shatabdi-like trains) seems a step in the right direction.

Has the Budget taken any steps for boosting the productivity levels of the Railways or augmenting efficiency thro-ugh use of information technology tools etc.

The operating ratio of the Railways is projected to touch 94.4 per cent in 2002-03 as against last year's 97 per cent. This is significant, though one should note that this also has to do with the hump of the one-time liabilities arising out of the Fifth Pay Commission's recommendations being crossed. This has resulted in some savings. Apart from this, one does know whether there is any real strategy for improving efficiency levels.

As for IT, only a small beginning has been made. There is an announcement about developing a computerised system for issuing offsite unreserved tickets even from locations other than the boarding station.

Our report had devoted a separate chapter on the use of IT to impart efficiency in the running of the Railways. After all, just like motherhood or apple pie, there is nothing controversial about the use of IT!

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