MANAGERIAL ECONOMICS

PROJECT
ON
GROWTH OF INDIAN RAILWAYS

Submitted to-
Ms. Meghnaa Sharma

Submitted by-
Anurag Mishra[FT-
Mishra[FT 09-729]
Durgesh Tiwari [FT -09-748]
Jagat Singh Nagar [FT -09-754]
Karnica Ghildiyal[ FT-
FT 09-762]
Shwetank Kumar [FT -09-856]
Sourav Mukherjee[FT -09-862]
 ACKNOWLEDGEMENT

We take this opportunity to convey our sincere thanks and gratitude to all those who have
directly or indirectly helped and contributed towards the completion of this project.

First and foremost, we would like to thank Ms. Meghna Sharma for her constant guidance
and support throughout this project. During the project, we realized that the degree of
relevance of the learning being imparted in the class is very high. The learning enabled us to
get a better understanding of the nitty-gritty
nitty gritty of the subject which we studied.

We would also like to

o thank our batch mates for the discussions that we had with them. All
these have resulted in the enrichment of our knowledge and their inputs have helped us to
incorporate relevant issues into our project.

Last but not the least we would like to thank God

God and our parents for their cooperation and
help.

Anurag Mishra
Durgesh Tiwari
Jagat Singh Nagar
Karnica Ghildiyal
Shwetank Kumar
Sourav Mukherjee
Executive
Summary
In the year 1832 the first Railway running on steam
engine, was launched in England. Thereafter in May
1843 a young Engineer Graham Clark got down from
a ship harbored at Mumbai (then Bombay). He was
sent to India to find out how and in which part of
India a railway can be built which would be useful to
transport cheap cotton from Indian hinterland first
to Bombay Harbor and then from there to England
by ship. Thereafter on n 1st of August, 1849 the Great
Indian Peninsular Railways Company was
established in India. On 17th of August 1849, a
contract was signed between the Great Indian
Peninsular Railways Company and East India
Company. As a result of the contract an experiment
experimen
was made by laying a railway track between
Bombay and Thane (56 Kms.). On 16th April, 1853,
the first train service was started from Bombay to
Thane.On 15th August, 1854, the 2nd train service
commenced between Howrah and Hubli.
Indian Railways is one off the busiest rail networks in
the whole world. In a single day it runs around
14,500 trains across various terrains covering 63,140
kilometers that transports millions of passengers. It
is also participating in a Trans-Asian
Asian railway link
project.
Choosing a project was not an easy task
considering the fact that there are presently
many socioeconomic factors whose impact
is immense in the Indian Economic and
Financial Growth. After visualizing the
various aspects, we decided to move
forward with Indian ian Railways(IR), the
world’s largest employer, not only because
it provides a mode of transportation but
also as a uniting factor in our country of
such great
at diversities. Also, currently, the
growth rate at which it is growing provides
lots of hope towards
towar boosting Indian
Economy.
The paper starts with an introduction on
Indian Railways. It reveals certain
startling facts about IR and, then,
proceeds with its objectivity and
methodology adopted for preparing the
project. The project than entering into
the
e arena of the modes of operation of
Indian Railways, tries to finds various data
and facts regarding its growth. The data’s
are supported by various graphs, which
help to get a clear view about IR’s
performance and also how it is
performing with comparative
comparati study. After
giving an elaborate detail on the
fundamental knowledge on IR, the
project further tries to provide some
conclusion based on the secondary data
been collected. It further analyzes the
retarding force which is hindering its
growth. It also tries to provide certain
recommendation which can enhance the
pace of IR, and help it to grow more.
The project, thus tries to broaden the
arena of visualizing the various modes
and growth factor of Indian Railways, and
its impact on National Economy.
 RAILWAY BUDGET presented by Mr. Lalu
Literature review Prasad Yadav cash surplus of the Railways
rose steadily from Rs 9000 crores in 2005 to
The role played by the Indian Railways in our
Rs 14000 crores in 2006 to Rs 20000 cr in
country’s socio-political development is
2007 & operating ratio has also improved to
indisputable. Apart from its stated duty of
76%.According to Parveen Parmar(professor
transporting men and goods across the
at C.M.) gives the charges of Indian railways
length and breadth of the country, it has
vs aviation sector along with the swot
played a stellar role in times of natural and
analysis. According to Mr.Sudhir
man-made disasters. Thus, the paper on
Kumar(Officer on Special Duty /Minister for
Turnaround of Indian Railways has shown
Railways) talk about the leading change and
how role of the railways becomes even
transformation in Indian railways & gives
more crucial to the development of the
more emphasis on public private
country as we enter the 21st century and the
partnerships in some areas like to run
pace of the growth of the economy
container trains , modernization of metros &
accelerates. As the country integrated with
computerized train enquiry centre’s. He also
the global economy all prices in the
talks about railway mission 2012. Sanjoy
economy had to align themselves to those
Majumder talks about Indian railways chug
prevailing in the international markets. Thus
into the future. How travelling by rail in India
as prices of transport services fell
has always been relatively inexpensive - a
internationally the natural protection that
trip from Mumbai to the capital, Delhi, costs
the domestic sector, including the railways,
between 425 and 3,000 rupees ($10-$73)
enjoyed became a thing of the past.
depending on the class of travel. But the
Simultaneously Indian railways started
deregulation of the Indian aviation market
facing newer challenges. This paper broadly
has led to a huge increase in budget airlines
describes about the looming financial crisis
offering cheaper fares. The Garib Rath is just
that IR has faced and the issues railways
one of many initiatives taken by Indian
needs to address with extreme urgency. It
Railways in its effort to attract more
also emphasized on the investment
passengers. At the other end of the scale is
decisions of IR, the lessons for IR, various
the Shatabdi Express for the rich & business
recommendations, reforming remuneration
class people
pattern of IR.

According to Dr. Rakesh Mohan (head of

Mr. G. Raghuram states, Indian Railways (IR),
expert group IR) in July 2001 that in the next
which was declared to be heading towards
sixteen years IR’s will face additional
bankruptcy as per the Expert Group on
financial liability of Rs 61000 crores , but,
Indian Railways in 2001, is today the second
under the ministry of Mr.Lalu Prasad Yadav it
largest profit making Public Sector
has achieved a lot of success as the
Undertaking after ONGC. The fund balance
crossed Rs.12,000 crores in 2005-06, which
had reached a low of just Rs.149 crores in
1990-2000. The total investment being
planning for the eight-year time frame
(2007-2015) is tentatively in the order of
Rs.350,000 crores. This confidence is not
only due to the rising trend of performance,
but also due to the significant growth in the
past two years. These two years coincided
with Mr. Lalu Prasad being at the helm of
affairs of the IR, having moved into his
rd
position on 23 May, 2004. Railway officials
called this as the ‘turnaround’ of IR.
Mr. P. C. Sharma explicates in his article
‘Safety as Key Business Theme! - Indian
Railways Perspective `Human error' is a
handy phrase and often covers a multitude
of sins. According to the Indian Railways, it is
responsible for 83 per cent of the train
accidents. Most safety committees have
called for strengthening infrastructure and
mechanizing the systems for signaling and
switching of tracks. However, the bulk of
the rail network still relies on outdated,
dilapidated safety assets. This is further
compounded by the fact that the past years
have seen a massive surge in railway traffic.
Probes into accidents reveal that most of
them result from signal failures - both
mechanical and human - as well as
derailments, collapsing bridges and shoddy
safety procedures at level crossings. Yet,
there is far too little attention paid to these
factors. For example, the repair and
maintenance of bridges is allocated a mere
0.5 per cent of the Railway Budget and even
this amount is not fully utilized. Many of
these bridges are over a hundred years old
and are relics from British times.
Dr Desh Gupta & Dr Milind Sathye analyzed
the factors that led to the turnaround of the
Indian railways from a low performing
organization to a high performing one.
There is a growing interest worldwide
strategy for turnaround of public services
because of the growing awareness that
public services need to be efficiently
deployed. Financial turnaround of the IR is a
function of factors (a) retrenchment (b)
repositioning (c) reorganization (d)
environmental conditions. Retrenchment
strategy helps in reducing operating cost.
They focused on dynamic pricing and
customer centric sub strategy within the
overall repositioning strategy. In
reorganization strategy, achievement of
efficient outcomes is through
decentralization of authority and
responsibility. But a substantial turnaround
the IR can be attributed by the favorable
environmental factors. Both ‘good
management’ and ‘good luck’ helped the
Indian Railways turnaround from a low
performing organization to a high
performing one in about five years.
Railway customers are primarily of two
types —those availing freight services and
those availing passenger services. The two
major sources of revenue for the railways
are then goods (freight) revenue and
passenger revenue which respectively form
about two-third and one-third of total
railway revenue. Railways have initiated
many policy changes to meet the
requirements of its customers, be it freight
or passenger services. While continuing the
process of reforms…..other priority areas
will be…improvement in passenger
amenities…control over expenditure and
stepping up of measures to prevent
leakages of revenue.
According to Dr. Rakesh Mohan (head of
expert group IR) in July 2001, said that in the
next sixteen years, IR’s will face additional
financial liability of Rs 61000 crores, but,
under the ministry of Mr. Lalu Prasad Yadav
it has achieved a lot of success as the
RAILWAY BUDGET presented by Mr. Lalu
Prasad Yadav cash surplus of the Railways
rose steadily from Rs 9000 crores in 2005 to
Rs 14000 crores in 2006 to Rs 20000 cr in
2007 & operating ratio has also improved to
76%.According to Parveen Parmar(professor
at C.M.) gives the charges of Indian railways
vs aviation sector along with the swot
analysis. According to P. C. Sharma
(/Minister for Railways) Investment in safety
is a good business proposition. No service
industry can
hope to grain and sustain customers if it is
not concerned, rather particular, about the
safety of its customers.
 TABLE OF CONTENTS

TOPICS PAGE

Introduction
01

Objectives Of Study and Methodology

03

Observation and
nd Analysis 04

24
Conclusion and Recommendation

Bibliography and References

29
Introduction
“Indian Railways is one of the most
studied institutions on the planet. For
almost every conceivable question that
can be asked, there already exists a
comprehensive and rigorous report that
lays out the facts and indicates the
answers. What is striking, however, is
that there has been little action on the
many reports IR has commissioned,
both internal and external. The
overwhelming sentiment of the Expert
Group is that time has run out. Action is
overdue. The imperative is to get
started fast on a programme of
restructuring and reform.”
-Expert
Expert Group on Indian Railways-2001
Railways
The economy is in an auto-pilot
pilot mode
(showing no signs of slowing down). We
have been witnessing a consistent
growth of nearly 7% in our GDP over the
last few years and hence the need for
infrastructure to sustain the same has
been felt all across the board as the
current
ent level of infrastructure is
insufficient to sustain such an increase
in GDP growth rate.
The Indian Railways is considered the
lifeblood of the nation and, hence, the
onus of carrying the economy on its
shoulder lies with the railways. The
boom in the economy has resulted in a
dire need of improvement and
enhancement of rail infrastructure in
the country. As part of the overall
strategy of restructuring the railway
infrastructure, a major
jor thrust has been
given to Public-Private Partnership..
1|Page
Indian Railways, the Department of the Government of
India, under
er the Ministry of Railways, is tasked with
operating the rail network in India. The Ministry is
headed by a cabinet rank Railways Minister, while the
Department is managed by the Railway Board. Board Indian
Railways (IR), the largest rail network in Asia and the
world’s second largest under one management,
spanning over 6,909 stations, over a total route length
of more than 63,327 kilometers (39,350 mi) divided into
three gauges – broad, metre and narrow, na carries 18
million passengers every day and more than 2 million
tons of freight daily. It is the world's largest commercial
or utility employer, with more than 1.4 million
employees. As to rolling stock,, IR owns over 200,000
(freight) wagons,
agons, 50,000 coaches and 8,000 locomotives
and ran more than 18,000 trains daily, including about
8,984 passenger trains and 9,387 goods ods trains.
IR is not a private corporate body; however, as of
recently, Indian Railways has adopted a corporate
management style. The Indian Railways are prima facie
encouraging Public-Private
Private Partnership in the capacity
enhancing and modernizing exercise. e. Projects through
the PPP model have been started in a few sectors and
envisaged in few other areas. Indian Railways has a total
state monopoly on India's rail transport.
Over the last few years Indian Railways has been
regaining market share in transport sector through
improved services, better utilization of assets, capacity
augmentation and customer friendly approach and the
revenues have steadily increased to the level of Rs84,233
crore in 2008-09. The thrust of improved performance in
2008-09
09 has hinged upon significant improvement in
asset utilization apart from capacity augmentation.
There has also been a positive response of the market to
Dynamic Pricing Policy and other innovative measures
introduced by Railways to gain market share. Indian
Railways have been following a systematic
Five Year Planning
ng process to prioritize &
achieve strategic objectives and allocate
resources optimally. The Five Year Plan is
further implemented, monitored and
reviewed on yearly basis through
thro Annual
Plans to ensure that priorities are met.
To give a broad picture of IR’s organizational
structure and size, the vast network is
predominantly Broad Gauge- 1676 mm (81%)
with 18274 kms of electrified route kms (29%).
Administratively IR under Ministry of
Railways is divided into 16 Zones which are
further sub divided into 68 divisions. There
are 13 Public Sector Units/Corporations, 7
major production units (manufacturing
(ma
electric and diesel locomotives, coaches,
EMU/ MEMU/ DEMU) other major
organizations under IR are Research, Design
and Standards Organization (RDSO), Central
Centr
Organization for Railway Electrification
(CORE), Metro Railway Kolkata and 6 major
training institutes. The freight and business
strategies, capacity augmentation and asset
replacement plan, technological up gradation
programme and other initiatives are planned
systematically across this vast organization
and along the complete value chain of Rail
transportation business through the Five
Year Planning process.
levels in last few years are still relatively
significant and range of 5%% to 7%.
7 To support
and propel this high projected GDP growth,
India needs rapid augmentation of capacity in
infrastructure be it Power Generation, Road
Network, Rail Network, Port capacity or
Telecom connectivity. Indian Railways being
the main transporter of bulk b freight,
containers and passenger traffic are a key
driver for supporting the GDP growth of the
country. Besides, Railways is also an engine
of inclusive growth. The XIth Plan (2007-12)
(2007
lays ambitious targets for freight and
passenger business transportation
transpor and
associated capacity augmentation and
technological up gradation
gradation.
The main objectives in the XIth Five Year Plan
are creation of adequate transport capacity
to handle the projected growth of both
passenger and freight traffic during the Plan
period
riod and provide improved services to both
the segments. Increase in market share in
freight traffic, both bulk and non-bulk,
non is also
an important focus area.

Despite the global economic downturn in

2008-09 which drastically affected
ffected demand,
Indian Economy has shown resilience and
witnessed a GDP growth of over 6% in 2008-
2008
09. The GDP forecast for next few years
although moderated from the 8-9%
8 growth

2|Page
Objectives of
Study and
Methodology
The objectives of the study in a nutshell are as
follows-
 To analyze the social and economic
growth of Indian Railways
 To analyze the impact of Indian
Railways on Indian Economy.
 To examine the strategies taken by
Indian Railways for its development.
 To find-out the problems, which were
hindering the growth of Indian
Railways since years.
 To study and analyze the drastic
Turnaround of Indian Railways.
 To determine various issues
concerned with the present rail
industry, to explore and recommend
some solutions towards these issues.
3|Page
We have used the secondary data for
conducting the study and analysis of our
project work.
Secondary data analysis is commonly known
as second-hand analysis. It is simply the
analysis of preexisting data in a different way
or to answer a different question than
originally intended. Secondary data analysis
utilizes the data that was collected by
someone else in order to further a study that
you are interested in completing.
 Railway Employees and renowned
persons
 Text-Books, etc
For the purpose of study we consulted
various:
 Websites
 Search - Engines
 Encyclopedia
 E - Libraries
 Articles (published and non-published)
written by some of the great research
scholars.
 Journals
 News-Papers/E-news-papers
 Magazines
Observation and
Analysis
In economics a company is said to have monopoly power
if it faces a downward sloping demand curve (see supply
and demand). This is in contrast to a price taker that
faces a horizontal demand curve. A price taker cannot
choose the price that they sell at, since if they set it
above the equilibrium price, they will sell none, and if
they set it below the equilibrium price, they will have an
infinite number of buyers (and be making less money
than they could if they sold at the equilibrium price). In
contrast, a business with ith monopoly power can choose
the price they want to sell at. If they set it higher, they
sell less. If they set it lower, they sell more.
As long as the price elasticity of demand (in absolute
value) for most customers is less than one, it is very
advantageous
antageous to increase the price: the seller gets more
money for fewer goods. With an increase of the price,
the price elasticity tends to rise, and in the optimum
mentioned above it will be above one for most
customers. A formula gives the relation between price,
marginal cost of production and demand elasticity
which maximizes a monopoly profit: (known as Lerner
index). The monopolist’s monopoly power is given by
the vertical distance between the point where the
marginal cost curve (MC) intersects with the th marginal
revenue curve (MR) and the demand curve. The longer
the vertical distance, (the more inelastic the demand
curve) the bigger the monopoly power, and thus larger
profits…Indian
Indian Railways too runs under monopoly
market
4|Page
On 15 April 2006, the Washington
Washingt Times
carried a lead story on the turnaround of the
Indian Railways (IR) —a — departmental
organization runs by the Government of India
(GOI). It stated ‘…few now doubt that Mr
Yadav (Minister for Railways) has presided
over an impressive business turnaround …
more importantly, he’s taken the world’s
largest employer — a government giant of 1.5
million employees — and boosted revenues by
15.5 percent without ut raising fares’ (Nelson,
2006:1). Pai Panandiker states ‘Indian Railways
has turned around and made an estimated
profit of $2.5 billion in 2005–2006.
2005 What is
important, however, is that, unlike previous
ministers, Mr. Yadav has looked upon Railways
as a commercial enterprise and not a social
welfare institution. [He] is a hard taskmaster
and will ensure his subordinates carry out the
projects’ (Pai Panandikar, 2006:1). The former
Railway Minister (Mr Nitish Kumar), however,
claimed that the foundation for the
turnaround was laid down by him, the results
of which are being realized now. In the media
interviews, he charged that Mr Yadav (who
became the Railway Minister in May 2004) is
usurping the credit for the IR success. It is
important to note at this stage,
st that since
2004 the growth rate of the Indian economy
has nearly doubled as compared to the three
years prior to that. Did the favorable
economic environment help the IR
turnaround or was it only due to the
managerial leadership provided by Mr Yadav
— the current Railway Minister? What caused
the IR turnaround — good management,
good luck or both — this is the question that
we explore in this paper within the
framework of public sector turnaround.
The study is important for several reasons.
First, there is a growing interest worldwide in
strategies for turnaround of public services
because of the growing awareness that
public resources need to be efficiently
deployed. The case of the IR is particularly
important given the large investment of the
GOI in the IR and the need to get adequate
return on investment. Second, the research
on turnaround has largely focused on the
impact of managerial strategies. We examine
the IR turnaround from both these
perspectives — good luck and good
management. Publicly available data about
the IR has been analyzed. We found that
both managerial leadership and good luck
contributed to the success of the IR. We
suggest that turnaround successes need to
be put in a wider context. Besides managerial
actions, favorable environment also
contributes to the success — an aspect that
has hardly received attention
organizational turnaround studies.
competition within the transport sector’. Mr
Yadav also underscored this policy in his first
railway budget speech on 6 July 2004. The
Minister stated ‘with a commercial
orientation, aggressive marketing and
economy measures, the Railways would be
continuously working towards further
improving their financial performance’
Performance of Indian Railways-
We have tried our best to find out the all
problems faced by Indian Railways so as to
analyze it’s past scenario and to find out the
reasons for it as well as to predict the future
scenario of the Indian railways on the basis of
various graphs, statistical analysis as well as
accounting analysis.
in

According to the World Bank, the IR is one of

the top five national railway systems in the
world; others being the United States, former
Soviet Union, Canada and China.

The basic plank of the IR turnaround is its

shift towards market orientation and
customer focus. As the then Railway Minister
Mr Nitish Kumar said while presenting his
2001–02-budget speech ‘Railways need to
develop market oriented and customer
friendly outlook due to emerging

5|Page
These graphs clearly show that the profit customer-centric
centric & dynamic pricing
of the Indian railways is not that much strategy. Also its operating ratio has
higher 5-77 years ago as which is in present. become better as the time surpasses as in
Its profit has increased about three times in 2008 its op. ratio has improved to76%
2006 than 2005 because of the various in2008 from 98.3% in2001.
strategy adopted by Mr. Lalu Prasad Yadav
Y Further while classifying the data,
data we are
like Retrenchment, Reorganization, able to reveal the following details-
details

Revenue
60000

50000

40000
Rs.(in crore)

30000

20000

10000

0
2001- 2002
2002- 2003- 2004- 2005- 2006- 2007- 2008-
2008 2009-
02 03 04 05 06 07 08 09 10(esti
mates)
Goods 24845 26505 27618 30778 36287 41717 47743 52700 58525
Passengers 11196 12575 13298 14113 15126 17225 20075 22330 24309

6|Page
 Employees
2
1.8
1.6
1.4
1.2 NO. OF STAFF (in mn)
1
0.8
AVG.WAGE PER STAFF PER ANUM
0.6 (in lakh)
0.4
0.2
0
2003-04 2004-05 2005
2005-06 2006-07 2007-08

As shown in the above graph,

graph the number
of staff of Indian railways had decrease
from 1470000 to 1392000.Retrenchment
2000.Retrenchment
strategy means trim off excess staff so to
decline overall expenditure. The approach
adopted by IR was not to fill vacancies
created due to retirement or other
reasons. The average wage as a result
increased a lot.
Now, on investment, the Indian Railway
has invested at various sectors. The below
data depicts the real picture.

3500
New Lines
3000

2500

2000

1500

1000

500

0
2009-
2005
2005-06 2006-07 2007-08 2008-09
10(est.)
AMOUNT (in Rs Crore) 1990.98 2501.04 2681.21 2963 2921

7|Page
 Guage Conversion
4000
AMOUNT (in Rs Crore)

3000
2000
1000 1241.74 2317.36 3011.85 3013
0 2054.1

Electrification
The investment on Freight
900
Corridor is estimated to
800
increase by 134% in 2009-10, 700
Amount (inRs)

from what has been in 2008- 600

500
09. Railways are able to 400 780.38 744
generate huge amount of 300
200 455.41
revenue, so investing more on 100 241
that area can place them in a 0 73
more profitable zone.

2000
1800
Frieght Corridor
1600
1400
Amount(inRs)

1200
1000
1880
800
600
400 780
200
0 0 7 86
2005-06 2006--07 2007-08 2008-09 2009-10(est.)
10(est.)

8|Page
 MiscellanousOther
Receipts Coaching
Sundry other 2% Earnings
Earnings 2%
4%

Passenger Earnings
27%
Goods Traffic
Earnings
65%

Where the rupee came from(2007-08)

from(2007

The chart depicts the percentage distribution of income and expenditure from various areas
of Indian Railways for the year 2008-09
2008

Lease charges
3% Development fund
Stores 3%
Depreciation 4%
reserve fund
7%

Staff wages &

Dividend other allowances
7% 25%

Miscellaneous
8%
Fuel
Pension 17%
fund
11%
Capital fund
15%

Where the rupee went(2007-08)

went(2007
9|Page
 16
GROWTH PERCENTAGE
PERCENTAGE OF EARNING AND EXPENSES
15
14

12 growth %age
of expenses
10.4
10
8.5
8.5 8.3
8

6.6 growth %age

6 of earnings
4.7 4.5
4.8
4
3.8
2

0
2001-02 2002-03
03 2003-04 2004-05 2005-06

The growth percentage of earnings has fallen

fal in 2003-04 from 2002-03,
03, afterwards and it has
consistently increased as the period surpasses.

90000

80000

70000
Amount (in Rs. crore)

60000

50000
Total Revenue
40000
Total Expenses
30000

20000

10000

0
1996199719981999
19992000200120022003200420052006200720082009

10 | P a g e
 90000
Revenue of IR (in Rs. crore)
80000

70000

60000

50000 Freight Revenue

40000 Passenger revenue

Misc Revenue
30000
Total Revenue
20000

10000

0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

The revenue generated by Indian Railway has
shown a sharp increase since 2005, and the
main reason being the increase in the freight
revenue. The total revenue touched the
Rs.80,ooo crore mark in the year 2008-2009,
2008
with the annual revenue being Rs.80,338
crore. Passenger revenue increased from
fro Rs.
19837 crore to Rs.22071 crore.

Figure- Indian Railways running crossing the hills.

11 | P a g e
Better resource management through increased wagon load, faster turnaround time and a more rational pricing
policy has led to a perceptible improvement in the performance of the Railways. Out of the freight and passenger
traffic, the freight segment accounts for about 70 per cent of revenues. Within the freight segment, bulk traffic
accounts for nearly 84 per cent of revenue earning freight traffic (in physical terms), of which about 43 per cent is
coal.

2007-08 2008-09 d
Particulars 2007-08* 2008-09*
Change % Change %

1. Revenue earning freight traffic (mn

793.9 832.1 9.0 4.9
tonnes)
Coal 336.9 369.4 7.5 9.7
Raw materials for S.P. (excl. Iron Ore) 11.1 10.9 - (-) 2.6
Pig iron & finished steel 25.8 27.1 - 5.3
Iron ore for export 136.7 130.5 - (-)4.6
Cement 79.0 86.0 8.0 8.8
Food Grains 38.2 34.1 (-) 8.7 (-)10.7
Fertilizers 35.9 38.8 1.9 8.0
POL 35.9 38.8 1.9 8.0
Container Service 21.1 28.9 - 36.4
Balance (other goods) 73.3 65.2 - (-)11.0
2. Net tonne kms (billion) 521.3 538.2 8.4 3.2
3. Net tonne kms/ wagon /day 3539 a 8472 c 9.3 -
4. Passenger traffic orig. (million) (d) 6524 b 6971 b 5.0 6.9
5. Passenger Kilometres(billion) 770 b 778 b 10.8 -
Source: Ministry of Railways
a) Up to March in terms of 4-wheelers, b) April-February (estimated),
c) Calculated in terms of 8-wheelers, d) Excludes Metro Kolkata.

*Excludes 1.21 MT for 2007-08 and 1.12 MT for 2008-09 for Konkan Railway Loading Figures of
2007-08 reflect the revised commodity group as modified from October 2007. As such, except for
Coal, Pig Iron and finished steel from S.P., Cement, Food grains, Fertilizers and Mineral oil (POL),
these are not comparable with the figures of previous years.

12 | P a g e
Indian Railways at Current Context Station amenities-
Out of the 594 stations identified for up
Freight charges gradation of passenger amenities through
Railways have rationalized the freight
Model Station scheme, 325 stations have
structure extensively to make it simple and
already been developed, while the rest are at
transparent. Pursuing market responsive
various stages of progress. Under the plan to
freight policies, the value-based freight rates
identify five stations in each Division to give a
have been changed to fixed ones. Under the
facelift on priority basis under the Touch &
new pricing strategy, surcharge is levied
Feel Scheme, 637 stations have been
during peak season and discounts offered
identified and 395 stations have been
during lean season, but, peak and non-peak
completed. The works for up gradation of
seasons have been fixed uniformly for all the
passenger amenities at B and D category
commodities while many commodities have
stations are planned to be completed by
different peak and non-peak seasons.
March 2010. In order to accommodate longer
Therefore in 2008-09, Railways have decided
trains carrying 24/26 coaches, platforms at
to modify this policy as per the prevailing
more than 502 (out of 596) stations have also
market conditions. In order that the
been completed during last three years.
difference between highest and lowest rates
is not more than two times, freight rates for
Computerization of passenger and freight
petrol and diesel were reduced by more than
Services-
17 per cent during the last three years.
The computerized passenger reservation
system of Indian Railways is the largest
Passenger fares
passenger reservation network in the world,
There is no change in Second Class fares on
with 1,721 locations and more than 6,800
Suburban sections. Second Class Fares up to
terminals (end-2008-09). On an average, 3.82
Rs.50.00 per passenger on Non-suburban
crore passengers per month are being
Mail/ Express including Superfast trains and
booked in PRS with average passenger
Ordinary passengers have been reduced by
earning of Rs.1,300 crore per month. Further,
Re.1. Second Class Fares beyond Rs.50.00 per
Railways has tied up with the India Post for
passenger on Non-Suburban section of M/E &
operation of PRSs through Post Offices.
Passenger including Superfast trains have
been reduced by 2%. Sleeper class fares
Freight operations information system
beyond Rs.50.00 per passenger for Mail/First
FOIS gives an account of all demands,
Class, AC 2-tier, AC- 3-tier and AC Chair Car has
number of loads/rakes/trains and their
been reduced by 2% for all distances. There is
pipeline, freight locos, stock at aggregate
no change in the existing fares of First Class
level etc. FOIS Phase I (Rake Management
Mail/ Express and Ordinary trains.
System–RMS) module implemented at 243
locations covers all major yards/ lobbies and
Up gradation of Passenger Amenities

13 | P a g e
control offices at divisions and zones. FOIS
Phase II (Terminal Management System–
TMS) has been commissioned at 523
locations.
Rail safety
With steps taken to ensure safety, the
accidents per million train km, and an
important index of rail safety, came down
from 0.55 in 2001-02 to 0.20 in 2008-2009. The
number of consequential train accidents
decreased from 194 in 2007-08 to 177 in 2008-
09. Special Railway Safety Fund (SRSF),
created in 2001-02 to wipe out the arrears in
renewal and replacement of over-aged assets
and for safety enhancement within six years,
expended was Rs. 16,318 crore till 2007-08.
Most of the intended works were completed
by 2007-08. Adequate contribution is being
made to the Depreciation Reserve Fund
(DRF) for future asset renewals.
Technology upgradation
RailTel was set up for creating OFC-based
communication infrastructure for train
operations and to generate revenue through
commercial exploitation of surplus capacity.
RailTel has set up an OFC network of 34,932
RKMs, of which 25,130 RKMs is of high
bandwidth capacity. A PAN India MPLS
network for providing connectivity to data
and voice circuits have also been set up. Till
date, 220 important and about 3,150 other
stations have been put on OFC network. With
this, the Indian Railways is now in a position
to lease the surplus capacity on commercial
terms.
14 | P a g e
Achievements and new initiatives in
signaling
 To increase efficiency and safety,
modern signaling system with route
elay /panel/ electronic Interlocking
along with multi aspect colour light
signaling in replacement of over-aged
mechanical/multi-cabin signaling
system has been provided at 416
stations.
 Automatic block signaling (ABS) has
been provided on 349 RKms to
increase line capacity.
 Intermediate block signaling (IBS) has
been provided on 87 block sections to
increase line capacity, by splitting the
longer block sections.
 Anti collision device (ACD) is
operational as a pilot project on
Katihar-Guwahati-Dibrugarh- Ledo
section of the North Frontier Railway.
 Train protection and warning system
(TPWS) has been provided on 50
RKMs in Chennai-Gummiddipundi
Section on the Southern Railway as an
aid to drivers. This will prevent cases
of “signal passing at danger” and
overspeeding.
 910 stations have been provided with
highly durable LED signals to improve
reliability and visibility of signals.
 Automatic clearance of block section
has been provided at 492 sections
 through use of axle counter. This will
reduce dependence on human
element and enhance safety.
Figure – Passenger at CST Mumbai
Indian Railway under LALU regime-
There are few political leaders in the country
who have been more sharply criticised than
Railways Minister Lalu Prasad Yadav. But
now, there is a genuine sense of respect for
what Lalu has been able to achieve for Indian
railways, which is looking healthier than it has
in years. When he wrestled the Railways
Ministry from Ram Vilas Paswan, many had
written the obituary of the Indian railways,
saying Lalu would drive
rive it into the ground.
But he’s proved the skeptics wrong.
Effective feat
 The Indian railways, an organization
heading towards bankruptcy seven
years ago when he took over, now has
surplus revenue of Rs. 11,000
crore(2006), a feat that has won
grudging respect
espect for Lalu.
 Lalu achieved the feat by taking
simple steps like competitive
passenger fares and reducing the
wagons’ turnaround time from seven
to five days.
15 | P a g e
 He also raised the carrying capacity of
goods trains from 3,200 tonnes to
4,000 tonnes, which led to higher
freight earnings.
“…This is just the start. We will soon
have surplus of Rs 20,000 crore. We will
do more, you see our profit will climb
even further…” added confident Lalu
Yadav
Turning to the Aam Aadmi slogan, the
minister said the railways will soon create
economic opportunities for the farmers. “We
plan to create a public-private
private partnership
model, wherein retail stores would be set up at
around 7,500 stations across the country. It
will facilitate procurement, distribution and
marketing.
keting. We plan to involve corporates in
this project. Global tenders will be invited,” he
said...
While the minister termed the bullet train
project unviable for the country, he told
media persons that the ministry plans to take
measures to tighten security
securi in the system.
“We plan to introduce close circuit TVs and
metal detectors at all the major stations. We
also plan to restrict entry at the platforms.
Only passengers will be allowed to enter the
platforms,” he said.
The minister also stated that he had big plans
to enable travelers to get a world class
experience. Starting with stations at major
cities like Ahmedabad, Delhi, Chennai,
Mumbai and Patna the new station will have
underground cross-overover system to reach
different platforms instead of an over bridge.
Analysis of the various strategies of Indian Railway-
Railway

16 | P a g e
Fig. - Mr.Lalu Yadav

17 | P a g e
The organizational Structure of Indian Railways has been shown by the following diagram-
diagram

18 | P a g e
 for achieving the stipulated targets and
Railway Mission 2012 necessary investment plans thereof. This
document will also contain details of
I. Double passenger traffic from 6000 to customer-centric
centric modern passenger
9000 million passengers services and various freight schemes to
II. Increase the speed of sharpen the competitive edge of
a. Passenger train to 100 kmph from Railways.
55kmph  This will have a blue print of an
b. Goods train to 60kmph from 24 kmph organization that encourages trans- trans
III. Reduce unit cost departmental decision making to take the
IV. Deliver world class services and Railways to unprecedented heights.
amenities Route wise planning would be done to
reduce traffic bottlenecks, expand the
RAILWAY VISION 2025 network and modernize the Railways.
Rai
 The passenger services will be governed
 The Railway Vision 2025 document which
by two words- ‘comfort and
will provide the long-term
term strategy of IR
convenience’. The buzz word in freight
with a focus on "customer-centric
"customer
business will be ‘commitment and
modern passenger services
service and various
connectivity’.
freight schemes to sharpen the
 This document will inspire the Railway
competitive edge of Railways". Comfort
management and its employees to do
and convenience for passengers while
new experiments, and will be like a
commitment and connectivity for freight.
guiding light for the future generation.
 The financial turnaround of the Railways
has been achieved by thinking beyond the
beaten path,, taking innovative decisions
in commercial, operational and pricing
policies and through cross functional
cooperation and coordination. For making
this
his magical turnaround durable.They
durable. are
working on to prepare a Railway Vision
2025 Document which will present new
ideas and initiatives in a novel manner.
This shall outline preparedness and
strategies for the future.
 This document will set forth the target
for the coming 17 years in the field of
operational performance and quality of
service. It will also
so detail an action plan

19 | P a g e
Highlights of Indian Railway Budget • ‘Onboard housekeeping scheme’ to cover
2009-2010 200 additional pairs of trains; ‘improved linen
management’ with modern mechanized
Introduction
automated laundries.
• “Inclusive growth” and expansion of rail
• Expanding facilities like ramps, special
network to reach development to every
signage, lifts, escalators, special coaches for
corner of the country is core to
physically challenged and aged persons.
developmental approach.
• Onboard availability of doctors in long-
• Economically unviable projects need to be
distance trains being considered; ambulance
viewed with social perspective being
services to be provided in seven cities to start
economic necessity for backward areas and
with.
under privileged.
• On-board infotainment services to be
• Expert committee to advice on innovative
provided on important long-distance intercity
financing and implementation of such
trains.
projects.
• Toilet facilities to be introduced in DEMU/
MEMU trains with journey time more than
Service to the Passengers
2 hours.
• Priority will be given to effect perceptible
• 1000 new PRS locations to be opened; UTS
improvement in
services to be expanded from 5000 to 8000
 Passenger Amenities
locations.
 Cleanliness
• Automated ticket vending machines to be
 Quality of Railway catering
installed at 200 large and medium sized
 Safety and Security and
stations.
 Punctuality
 Taking ticketing to ‘Maa Mati Manush’
With focus on strict monitoring
grassroot, through issue of computerized
tickets at Post offices and ‘Mushkil Aasaan’
• Extensive availability of Janata Khana,
mobile ticketing service vans.
national and regional cuisines.
• Air-conditioned double decker coaches for
• 50 stations to be developed as world class
inter-city travel to be introduced.
stations.
Safety and Security
• 375 stations to be upgraded as ‘Adarsh
• Timely track renewal, modernization of
Stations’ with basic facilities including
signals, use of digital ultrasonic flaw
drinking water, adequate toilets, ladies
detectors etc.
dormitories etc.
• Integrated Security Scheme to be
• Multi-functional complexes to be
introduced at 140 vulnerable and sensitive
constructed at 50 railway stations serving
railway stations.
centres of pilgrimage, tourist and industry. To
• Women RPF squads for security of women
have shopping facilities, food stalls, budget
passengers
hotels etc.
20 | P a g e
 Staff Welfare
• 6,560 staff quarters to be constructed in
2009-10.
• Indoor stadia to be developed in major
railway divisions and zones.
• Increased contribution of Rs 350 per
employee to Staff Benefit Fund to continue
for a year, with Rs 100 per employee for
women empowerment, vocational training of
physically and mentally challenged wards
especially girl child, and higher education for
girls.
• Scholarships for higher education of girl
child of group D staff.
• Proposal to open 7 nursing colleges on
railway land at Delhi, Kolkata, Mumbai
(Kalyan), Chennai, Secunderabad, Lucknow
and Jabalpur on PPP model to facilitate the
wards of railway employees in finding
vocational avenues.
• Burn Units at major Railway hospitals.
• Metro Railway Hospital to be upgraded to
75 beds.
• Medical colleges planned to be attached to
existing railway hospitals at 18 locations
through PPP mode.
• Dormitories for railway families
accompanying patients to be provided at 16
hospitals having 150 beds and above.
• Policy on Railway Recruitment Boards to be
reviewed.
• Special recruitment drive for filling
vacancies of Scheduled Castes and Scheduled
Tribes and Physically Handicapped quota.
Freight and Parcel Business
• Premium service for container movement
with assured transit time being considered.
21 | P a g e
• Private ownership of special purpose
rolling stock for commodities and private
operation of freight terminals will be
encouraged.
• Mega logistic hubs being planned alongside
Eastern and Western Dedicated Freight
Corridors.
• Kisan-Vision project – Running special trains
from production clusters to consumer
centers for perishable products like fruits and
vegetables to reduce wastage and also for
village handicraft, cottage industry & textile
products to increase outreach and access to
new markets for rural produce. Temperature
controlled cargo centres to be encouraged.
 Premium Parcel Services named Faster
Parcel Services on pilot basis on three
routes to run with guaranteed transit
time from dedicated terminals.
Landmark initiatives
• Dedicated Freight corridors declared
‘Diamond Rail Corridors’.
• Foundation being laid for development of
Eastern Industrial Corridor alongside the
Eastern Freight Corridor.
 Railways’ land banks to be
productively utilized to catalyze
development in this corridor.
 Investment in rolling stock production
and assembly facilities proposed for
development of rail based industrial
cluster drawing upon advantage of
proximity to mines, labour force and
metal works market.
• Setting up of a new factory at Kanchrapara-
Halisahar Railway Complex with annual
capacity of 500 EMU/MEMU and Metro
coaches in Joint Venture/Public-Private
Partnership mode.
• Proposal to initiate action for setting up
1000 MW power plant with Ministry of
Power, at Adra, in under developed tribal
area.
• State of the art training facilities proposed
at Dankuni for young artisans and
supervisors, thereby contributing to national
talent pool.
Financial Performance in 2008-09
• Freight loading at 833 million tonnes (MT)
grew @ 5% on previous year.
• Traffic receipts also increased by 11.4% to
reach Rs 79,862 cr.
• Cash surplus before dividend Rs 17,400 cr
after disbursing Rs 13,600 cr towards
implementation of 6th Central Pay
Commission.
• Railways paid full dividend liability of Rs
4,717 cr to Government.
• Investible surplus of Rs 12,681 cr generated.
• Annual Plan expenditure was Rs 36,336 cr.
Budget Estimates 2009-10.
• Freight loading targeted at 882 MT – an
increment of 49 MT; number of passengers
likely to grow by around 6%.
• Gross Traffic Receipts (GTR) estimated at
Rs 88,419 cr i.e. Rs 8,557 cr more than 2008-
09.
• Ordinary Working Expenses budgeted at Rs
62,900 cr to cover the full year impact of VI
CPC and the payment of 60% arrears due in
2009-10.
22 | P a g e
• The dividend payable to General Revenues
kept at Rs 5,479 cr.
 Budgeted Operating Ratio 92.5%.
Concessions
• ‘Izzat’- A new scheme for travel with
dignity. Issue of concessional MST of Rs 25
for people, with monthly income upto Rs
1,500, in unorganized sector, for travel upto
100 km.
• Press correspondents to get ‘photo
identification cum credit cards’ on
certification of PIB and other competent
authorities instead of existing system of
coupons.
 concession of 30% to increase to 50%
for Press Correspondents
 50% concession for travel with spouse
also to be given once a year.
• The existing student concession to be
extended to students of Madrasas, higher
Madrasas and senior Madrasas.
• Concessional MST available to students in
Kolkata will be applicable for travel in Metro
Rail Kolkata also.
Special Trains
• ‘Only ladies’ EMU trains to start in Delhi,
Chennai and Kolkata sub-urban during office
rush hour.
• ‘Yuva Trains’ - New low-cost, air-
conditioned, seated accommodation trains,
dedicated specially for young generation and
low-income groups.
 To run from rural hinterland to major
metros/cities; fare to range from Rs
299 upto 1500 km to Rs 399 upto 2500
km.
  Weekly service on pilot basis to be
introduced within 3 months between
Mumbai to Delhi and Delhi to Kolkata.
• ‘Duronto trains’ - for the first time new
Non-stop, point to point train services.
Starting with 12 trains.
Other New Train Services
• 57 new train services to be introduced.
• Extension of 27 trains also envisaged.
• Frequency of 13 trains to be increased.
Annual Plan 2009-10
• Plan outlay is Rs 40,745 cr. Increase of Rs
2,840 cr on Interim Budget.
 New lines outlay - Rs. 2,921 cr ;
increase of 166% on interim budget
 Gauge conversion - Rs 1,750 cr. –
increase of 24% on interim budget
 Passenger amenities - Rs 1,102 cr - 119%
increase on interim budget excluding
PPP provision, which is unlikely to
materialize.
 Staff Quarters - Rs 335 cr - increase of
49% on interim budget.
 Staff Amenities - Rs 424 cr- increase of
79% on interim budget.
 Acquisition of 18,000 wagons in 2009-10
against 11,000 in 2008-09.
• Additional budgetary support of Rs. 1,949
cr. sought for 11 national projects.
• Feasibility study for energy efficient rail
based system to provide connectivity to
suburban system in Kolkata, Mumbai and
Chennai.
• Proposals for better integration of
passengers’ movement in Kolkata suburban
area.
23 | P a g e
• Quazigund-Anantnag New Line to be
completed by August, ’09.
• Creation of Northeast Rail Development
Fund under consideration for timely
completion of national projects in N.E.
Region.
• New proposals for better rail connectivity
proposed to be processed which include 53
for new lines, 3 for gauge conversion works
and 12 for doubling.
Other important announcements
• Setting up of an expert committee headed
by Shri Sam Pitroda to suggest innovations
to utilize optic fibre cable network of
Railways and take information technology to
door steps in remote areas.
• Project Monitoring Committee for
developing mechanism to avoid slippage in
project delivery. Special monitoring for
National Projects.
• Railways to come out with white paper on
organizational, operational and financial
status based on last five years performance
and develop Vision-2020 with long and short
term strategy and plan of action.
• Modernization of select railway printing
presses. Offer for takeover of heritage
institution Basumati Sahitya Mandir, for
revival.
• Takeover of Units of Burn Standard and
also Braithwaite under consideration.
• Revision in Tatkal Scheme to make it more
user friendly. Advance booking period
reduced. Minimum charge reduced to Rs.100.
• No increase in passenger fares and freight
tariffs.
Conclusion and
Recommendation
Both ‘good management’ and ‘good luck’
helped the Indian Railways turnaround from
a low performing organization to a high
performing one in about five years. The
foundation for the turnaround was laid
during the tenure of Mr Nitish Kumar, which
the former Railway Minister, Mr Yadav,
implicitly accepted in his first budget speech.
It goes to the credit of Mr Yadav that he not
only continued those policies (though
initiated by a rival political party member) but
importantly ensured that they produced
results. This demonstrates that the
organization moved away from past malaise
of politicization of decision making processes
and policies, to a more corporate minded
commercial focus. It adopted three major
strategies for a turnaround. Through the
retrenchment strategy it was successful in
reducing the operating cost. It focused on
dynamic pricing and customer centric sub-
strategy within the overall repositioning
strategy to significantly increase revenue —
in particular the freight revenue.
Reorganization strategies like human
resource development initiatives and
achievement of efficient outcomes through
decentralization of authority and
responsibility aided the IR turnaround.
Importantly, the IR benefited from favorable
macro-economic environment like increase in
the growth rate of the economy and the
growth of exports. The implication of our
study is that an organization’s turnaround
24 | P a g e
success needs to be put in a much wider
context. It could be due to ‘good luck’ and
not due to ‘good management’ alone as most
of the extant literature tends to suggest.
Turnaround: a myth or reality!!!
Former Railways Minister Lalu Prasad Yadav
has been trumpeting from atop the Red Fort
that he has got the railways to perform and
earn a profit of Rs 21,578 crores during 2006-
7, surpassing the ONGC. As it later turned out,
the turnaround story was one third true, one
third media hype and one third jugglery of
figures. A close scrutiny of railways accounts
reveals a net profit of Rs 11,000 crores. Even
this amount was earned at the expense of
unsuspecting passengers and at risk to their
safety. A large amount of money reflected as
profit is not available to be ploughed back.
Part of it is suspense account, money
promised to the railways but not yet in its
kitty.
Disturbing Facts
Lalu Prasad claimed the railways made a
profit of Rs 21,578 crores. Actual profits work
out to Rs 11,000 crores.
Rs 9000 crores pension fund shown as
profits.
Miscellaneous funds – Rs 2,500 crores
included in profits.
Rs 1,700 crores meant for lease of wagons
reflected as profits.
Profit figures inflated by advance earnings for
2007-8 in last year’s balance sheet.
Funds promised by Finance Ministry, but not
yet received, included as profits.
Excess tonnage carried ignoring safety
concerns fetched Rs 5000 crores.
Hidden costs to passengers earned Rs 325
crores.
The railway under Lalu has altered the way
the balance sheet is presented. It has shown
a remarkable creativity to artificially inflate
revenues while at the same time degrading
the quality of service. Consider the following:
Diluting Tatkal. - 10 % seats meant for those
traveling in emergency earned Rs 100 per
ticket. This has now been changed to 30 %
seats with a surcharged of Rs 250 per ticket.
Declaring Trains Superfast- Over 100 trains
have been declared Superfast without any
change in running time or facilities. The
Superfast tag fetches Rs 75 crores.
Doubling Cancellation Charge- Added profits
Rs100crores.
Onward Journey More Expensive- One can no
longer buy a single ticket if one has to change
trains for an onward destination.
The Actual Profits
The railways primarily did two things:
25 | P a g e
substantially increased the load carried by
freight trains and put in place a slew of
ticketing rules which extracted money from
passengers even as Lalu Prasad claimed he
had not raised fares.
The chunk of the profits, Rs 5000 crores,
came by increasing the carrying capacity of
container wagons by ten tones each. In
private, however, experts have questioned
on grounds of safety. The rail infrastructure –
tracks, wagons, engines can only be
stretched to a limit. While the loads carried
increased there was no corresponding
enhancement of maintenance standards/
schedules. Earlier, train examination was
done every time a train returned to its base
station, irrespective of the distance traveled.
This was changed to every 7,500 Km. As a
result; various zonal divisions reported
increased rail fractures, stress on old bridges
and wagon coupler failures due to increased
axel loads and less frequent maintenance.
The axel loads were increased without any
trials, checks, tests or technical analysis. It is
ironic that Lalu Prasad could increase the axel
loads because of infrastructure upgradation
executed by his predecessor, Nitish Kumar.
On the brighter aspect-
Inspite of having a dark phase earlier and
various challenges with respect to growth
the turnaround of the Indian Railways was
really a great surprise for India as well as for
the world. Without Lalu Prasad Yadav’s
strategy it would not have been possible to
make such a huge public sector unit into a
profit making industry that too within 30
months. The strategies which former rail
minister have followed are very hardnosed
economic realities and pretty different from
those which are generally followed
fol by the
corporate giants for revenue generation.
From time immemorial the road transports
had been a great competitor for Indian
railways but with the improvement in the
overall infrastructure in the railways it seems
that the cut throat competition hash subsided
to a great extent. As the freight charges have
not been increased much but still the services
have been improved by several folds.
Still there are few more problems which IR is
facing presently like the threat from the low
cost airlines. Peoplee of higher classes prefer
travelling by flight than by superfast trains to
save on their time. So here we can say that
may be Indian railways need to introduce
some more advanced technology to meet the
needs of the customers as well as to attract
more number of customers.
Even after this huge success of Indian
railways in terms of revenue generation there
are still rooms for improvements in the areas
like investments, policy making, maximizing
its market share, institutional separation of
roles; clear differentiation between social
obligations and performance imperatives;
and the need to create a leadership team
committed to and capable of redefining the
status quo.
26 | P a g e
Current Issues and problems-
problems
 Higher demand for Freight and
Passenger transport, with
wit planned
economic growth
 Need for capacity enhancement in the
Railway network over the next 10-15
10
years
 Technological uprgadation for better
maintenance of railway assets
 Greater competition from Roadways,
with major investments in Highway
network upgradation
ation
 Increase freight market share through
higher availability of services at
competitive prices
 Greater attention to passenger
services and safety
 Heavily subsidised passenger fares,
distorted passenger pricing
 Upgradation of the Railway
Production unitss for improved
efficiency and productivity.
productivity
Recommendation
Recommendation-
 Recommendations on Infrastructure
 Ageing Infrastructure(operational and
administrative)
1) Maximize the operational capability
and efficiency of every train
(i) using 3 phase a.c. drive
engines for all the engines by
replacing all the low capacity
d.c. series and disel engines
(ii)replacing the heavy weight
bogies and creating low weight
bogies,, making the best
 possible design for the
bogies for passengers and
for goods and for material
separately
(iii)using the best signaling
and interlocking system so as
to reduce the manual
operation and preventing
the human errors
responsible for accidents
2)Ensure
nsure maximum utilization of
railways for transportort of goods and
material also ensure maximum
utilizationn of railways by commuters
and passenger also expand the
railway network where traffic
tra is very
high , cut-off or dismantle the
railway network where traffic is very
low,this
this step will help the railways
to generate maximum income.
 Recommendations on Security
 Poor
oor safety record(accidents
security)
 a dismal record of optimally utilizing
assets like land, freight and
unresponsive staff)
 Recommendation on Public Services
 Passengers Security
Security is one more care
takable issue. To avoid any
train robberies etc trains
need
more security ppl. Actually
we can think of automatic
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doors which open only at
stops that can avoid robbery
to some extent.
extent
 Hygienic, cleaniness
First things that come to t
mind are cleanliness (both in
rails and in those bathrooms)
and security. For the railways
to be clean obviously us
need more staff that clean.
clean
The
he bathrooms and put them
clean after every travel and if
possible between too maybe
when the rail stops for a
longer time.
Avoid sales of unclean and
untidy food supplies in the
trains. Allow licenced
leanfood providers to supply
food. If needed privitization
can be done and improve the
neccessary.
 Good Quality of Food
This
his not only gives u a loss
but also mess
messes the
comnpartments as they have
huge utensils and improper
dining facity makes it dirty all
over. Instead good food
packed compact and easy to
use disposable packets
would help a long way food
is hardly tasty and more over
never hygienic. They are
stale at times and never
worth for money.
money
 Recommendations on Technology Smart and Stored Value
Advancement Cards for MST / Passes .
 Using IT for greater efficiency RFID based Smart card &
A large complex Biometric technology for
Infrastructure System such passenger screening and Re-
as the Indian Railways can vamped Revenue
benefit greatly from the Management System.
System
intelligent use of IT.
IT

Applications should
transcend boundaries of
railway organisation and go
into the domain of the
customer.
The below diagram shows the service
provided by the Indian Railways to the
various segment of people according to the
income group.

Implement decision support

systems

ERP for Integration with

communication systems and
other technologies.-use
technologies. of
Internet, mobile phones,
hand held terminals,
universal product code
readers etc

Manage efficiently
continuous improvement in
technology.

E-enabledFreight
Freight
Management System .

Customer care centers

Intelligent Stations
Infrastructure

Self service kiosks at Stations

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 
Bibliography and Indian Railways-opportunities
opportunities and
challenges (pdf document) at
References http://infrastructure.gov.in/pdf/broc
hure_railway.pdf.Accessed on 12
June 2007.
Text Books:  ‘Economic Growth derives Indian
 Managerial Economics, Fourth Railways spending’ at
Edition http://www.railwaygazette.com/fea
-Craig
Craig H. Petersen tures_view/article/2007/07/7580/eco
-W. Cris Lewis nomic_growth_drives_india
nomic_growth_drives_indian_railwa
-Sudhir K. Jain ys_spending.html Accessed on 10
July 2007.
 Managerial Economics
-Samuelson  U.S General Accounting Office
Public-Private
Private Partnerships Terms
Search Engines: Related to Building and Facility
 www.google.com Partnerships at
 www.yahoo.com http://www.gao.gov/archive/1999/g
g99071.pdf Accessed on 24 June
 www.yagoohoogle.com
2007 Government of India. 2006.
2
 www.altavista.com Report of the Task Force. The Delhi
– Mumbai & Delhi–Howrah
Delhi Freight
Corridors.
Web Links:
 www.indianrailways.gov.in/Accesse
d on 20 May 2007.
 Indian Railways 2001. The Indian
Railways Report -2001.Expert
2001.Expert Group
on Indian Railways Vol. 2 Part I & II.
 Yadav, L.P Rail 2006-07
2006 Budget
Speech on
www.indianrailways.gov.in
 Accessed on 25 May 2007 Guidelines
Financial Support to PPP
infrastructure 2007 Secretariat of
the Committee on Infrastructure at
www.infrastructure.gov.in
www.infrastructure.gov.in.
Accessed on 15 June 2007.

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