Govt mulls pvt role in rly, scrapping of fare subsidy | india | Hindustan Times
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Govt mulls pvt role in rly, scrapping of fare subsidy

india Updated: Nov 03, 2014 01:58 IST

Scrapping the railway board, merging the rail budget with the main budget and withdrawing the passenger fare subsidy are among the radical reform proposals the government is considering, official sources said.

Railways minister DV Sadananda Gowda is also contemplating a role for private stakeholders in policy-making and lateral entry for IAS officers into the top rail hierarchy to “de-centralise and corporatize” the functioning of the public transporter, which carries roughly 23 million passengers daily.

“The railways served the nation well in the initial decades after Independence, but its administrative and institutional structure and functioning seems archaic and unscientific in the present context and needs overhaul. These tasks are huge and difficult and will need to be attempted progressively,” Rail Restructuring Committee chairman Bibek Debroy told HT.

The committee was set up recently by the Indian Railways to take forward Gowda’s budget announcements on restructuring the rail ministry and railway board.

All these reform proposals have been mentioned in the reports of several expert committees.

A top government priority is to replace the “outdated and flexible” accounting practices with a professional “corporate accounting” system that can provide scientific data on the profits and losses of rail operations, the sources said.

“The railways must eventually work towards… charging passenger fares commensurate with expenses incurred in providing for the cost of travel. But the progressive hike in fares will also have to be matched with better passenger amenities,” Debroy said.

Currently, passenger fares are hugely subsidized, resulting in an annual loss of Rs. 25,000 crore in this segment. A proposal to merge the railways’ nine different cadre and provide for a single, unified cadre — to be called the Indian Railway Service — is also part of the surgical operation plan.