Indian railways is not just a means of transportation but also a thread that connects the entire nation through exchange of ideas, people, culture, art, and goods. It plays a critical role in Indian economy, polity and society. Unfortunately, railways has faced many financial and infrastructural challenges in the last two decades.

 

One major reform recommended by the Bibek Roy Committee (and recently accepted by the government) is about scrapping of rail budget altogether.

 

Various merits of this step are as follows:

  • Railway budget has been a means of promoting populist measures such as announcing new trains in constituencies of respective railway ministers and so on.
  • It has not focused on addressing structural requirements of railways. Scrapping it will democratize railways and promote a more agile and efficient railways.
  • Scrapping it promotes the vision of “maximum governance”
  • It has lost its efficacy since 1924, when it was a large portion of government expenses. Today, it is smaller than even the defence budget.

 

Demerits:

  • Mere economic fixes are not enough for railways. Focus needs to be on leadership, management, cultural changes in organization etc.
  • Since railway budget is merged with general budget, it further could take away attention from reforms in railways.

 

Way forward

The future of railways lies in developing its manpower through capacity development, introducing more freight lines to decongest the railway traffic and also providing better amenities and attractive fares to people. This can be achieved through incremental reforms (as suggested by Economic Survey 2014).