Friday, March 1, 2024

Mr Prime Minister, on the advice of the economists and the power hungry Generalists, please do not dismantle the finely tuned machine called Indian Railways

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Ministry of Defence is supposed to be having separation of policy and operations. Policy is with the bureaucrats in the Ministry, and operations with the three Services.

But in reality, the bureaucrats control the three Services. This is done using the simple device of control on promotions and postings of the officers of the rank of Colonel and above. In addition to it is the control on expenditure. This control doesn’t mean that bureaucrats make sure that the expenditure is within the budget allocation, but by making rules that each proposed expenditure would require ministry’s approval. That is why we had that famous “snowmobile” case. Army wanted to purchase snowmobiles for use at Siachin, but babus in the ministry were not convinced of the need. Finally the then Defence Minster intervened, approved the snowmobiles, and directed the bureaucrats who were not convinced of the need of snowmobiles to visit Siachin to verify the need firsthand. Of course they did not go. Even the Minister could not make them visit Siachin.

Similar is the story across all ministries. It begins with the fancy words: “separation of policy making and implementation functions.” But gradually everything gets concentrated in the Ministry, using the tools of control on transfers, promotions, and expenditure. Bureaucrats start enjoying all power, without any responsibility. Police department is a similar story. Home Ministry controls transfers and budget, but never gets the flak, which goes to the police top brass.

Railway ministry is the rare island in India that is not controlled by the Generalists. And that is one of the main reasons that it is doing a fairly good job. In fact given that it is a departmental undertaking, and not even a Corporation, it is doing a phenomenal job.

And for the same reason it is always under attack. Almost at any given time, a fresh attempt by the generalists is underway to wrest its control. After all, its turn over is almost one tenth of the Union budget. So tempting.

Of course today Railway is in a crisis. But it is not in the crisis because it is run by the Professionals, and not by the generalists. It is in the crisis because successive Railway Ministers have used it as an election winning machine, and as a result, have not increased passenger fares for almost ten years. Whereas on expenditure side, even staff costs, which are almost fifty percent of the operating expenses, increase by about twenty percent every year.

It is wrong to think that this happened because professionals managing the Railway were not able to tackle the minister. Even the then Prime Minster was not able to tackle those Railway Ministers!

And Generalists are not any better at tackling the ministers. If they were, the country would not be in such a mess. Especially in the states, they have colluded with the politicians to loot the exchequer dry, and turn the state governments into just one more extortion gang in the town.

Power grabbers use crises to move in for the kill.

Crisis in Railway is being seen by the Generalists as the best opportunity to occupy this last remaining island not under them at present.

Of course, in an ideal world, it would be immaterial as to who runs the Railway. But the world is not an ideal place, and by their performance across all Ministries, the Generalists prove that they would make a real big mess of Railway.

Railway has a rare decentralisation of transfer and postings. And in case of levels for which transfers and postings are controlled by the Ministry of Railways, cronyism comes into play, even though the Ministry is manned by the Professionals. Coming of Generalists would make it a free-for-all circus.

As for the economists, they make good professors, analysts for the investment firms, and the newspaper columnists. Rarely any economist has become a CEO for a nuts and bolts business. So to think that economists can prescribe medicine for the ailing Railway is an illusion. They would do the bidding of the Generalists, simply because the Generalists have so much to offer in return.


Therefore, Mr Prime Minister, on the advice of these interest groups, please do not tinker with/overhaul this finely tuned machine called Indian Railways.

Just increase the passenger fares to at least equal to the bus fares on parallel routes. Rest will be taken care of by the Professionals managing the Railway now.

If at all some changes are called for, there are two alternatives:

  1. Make all Zones and production units Corporations under Ministry of Railways, with Ministry of Railways being staffed by the Railwaymen as presently. This will give the required flexibility in the matters of finance and investments.
  2. Keep all Infrastructure and Operations under the present departmental undertaking, and create a separate Corporation to manage Commercial functions. This Corporation can be given management of all Stations and Goods Terminals, and will pay the departmental undertaking for carrying its passengers and goods. This will create flexibility in the sale of the product – the carriage of passenger and goods- and would dramatically improve accounting.


As far as turf wars among different Services of Railway (no doubt there are too many of them) are concerned, that is a problem of integrity. An honest man would work for Railway, not for his Service. And the railwaymen will not be more honest than the society they come from. For further details on that, the book “Corruption in India,” by Anang Pal Malik, may be referred to. (Available for free download at this site.)

Power is a dangerous thing. And its concentration is even more dangerous. Concentration of power in India in the hand of the Generalists is not working well for the country. So instead of handing over the only remaining ministry, Railway, to them, power should be decentralised, and the Home Ministry should be given to the IPS, Finance ministry to the IRS, IC&CE, IAAS, IRAS (that is the services that are dealing with revenue collection, accounts, finance and audit in various departments), and Defence Ministry to the personnel drawn from the three Services.

Power divided is power diminished.

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