A Hesitant Step Forward

Context: The recent structural changes in the Railways are commendable; however, certain issues remain.

Recent Structural Changes and their Positive Implications

• Creation of a post of Chief Executive Officer: Whereas earlier the Railways was headed by the chairman of the railway board, now the chairman will be called CEO.

• Unity in decision making: Earlier the decisions were abandoned by the chairman when any two members of different boards do not concur on a decision.

• Setting the right governance structure: The dynamic CEO will be able to smoothen the administration for better realization of resources.

• Reduced size of the railway board: It will comprise five members, including the chairman and CEO. Three posts at the board level have been eliminated.
• Merger of all the railways' services into a single Indian Railway Management Service. 

• Prevents Departmentalism: The bane of the Railways earlier was ‘departmentalism’, members of different services putting the interests of their own fiefdoms foremost.

Remaining Concerns with the Railways

• Limited accountability of the CEO: Whereas a corporate CEO is answerable to all his/her shareholders, the Railways CEO will remain answerable to the minister above him.

• The Railways will remain open to all political directives which have traditionally stood in the way of public sector enterprises being run professionally.

• Ignored structuring along customer segments: It was long term expected that structure would be along customer segments. For, E.g. there would be a member for freight and a member for passengers.

• But that has not happened. There will now be a single member in charge of operations and business development.

• Dissatisfaction among the officers: the officers are against the merger, and the process of merging the services is likely to be a long-drawn-out affair.
• The political compulsion of munificent job provider: While the Vision 2020 document of 2009 set out a goal of reducing staff by 1% a year through natural wastage and non-recruitment, the opposite has noticed –

• For, E.g. Recently, the Railways announced plans to recruit up to 1.4 lakh hands through online processes in view of the raging pandemic.
• Over half of what the Railways earns goes in meeting staff and pension expenses.
• Technology adoption naturally reduces the requirement of further recruitments.

Conclusion: While the CEO is expected to bring positive outcomes, giving the Railways an image of being a munificent job provider instead of a lean and fit profit-making organization raises question efficacy of the changes.