Policy Update
Geetam Acharya
Introduction
The Railways (Amendment) Bill, 2024 was introduced in Lok Sabha on August 9, 2024. The Bill seeks to repeal the Railway Board Act of 1905. The 1905 Act provides for the constitution of the Railway Board to administer Indian Railways, which is a departmental undertaking of the central government. The Bill seeks to incorporate provisions regarding the Railway Board into the Railways Act of 1989. The 1989 Act provides the country with a legal framework for railways. The amendment comes at a time when the Indian Railways, an essential transport lifeline in the country, needs flexibility to accommodate modern challenges like infrastructure upgrades, technological innovation, and growing passenger and freight demand.
Functioning
The Railway Board is the central body responsible for railway policy, operations, and administration. The 1905 Act provides that the central government may invest powers and functions of the government in the Railway Board with respect to any or all railways. This may be done through a notification. The Bill incorporates these provisions into the 1989 Act. It adds that the central government will prescribe: (i) the number of members of the Board, and (ii) qualification, experience, terms and conditions of service, and manner of appointment for the Chairman and members of the Board. It also adds that the Board will be provided with a secretary, and officers and employees, as necessary.
Performance
Evaluating the Railways’ performance, particularly over the last 2–3 years, reveals both achievements and areas needing improvement:
- Key Figures: In FY 2023–24, Indian Railways earned Rs 240 crores in revenue, up from Rs 191 crores in FY 2021–22, indicating a steady improvement.
- Budget Allocations: According to the Union Budget reports, The Ministry of Railways has received a record allocation of over ₹2.55 lakh crore in the financial year 2024-25, which is a jump of 5.85% from the previous year’s ₹2.41 lakh crore,
Impact
The impact of the Railways (Amendment) Bill, 2024, is expected to be significant, with an improved governance framework likely leading towards better implementation of large-scale projects and improved financial sustainability for Indian Railways.
- Modernization: Increased electrification, implementation of the Dedicated Freight Corridor, and improved passenger services.
- Financial Viability: Streamlining of governance can lead to faster decision-making and higher revenue generation, reducing operational inefficiencies.
- Stakeholder Satisfaction: Increased transparency in Board operations should improve public perception, ease of doing business with freight customers, and overall satisfaction of passengers.
Emerging Issues
Operational delays continue to hinder the execution of key railway projects, despite ongoing modernization efforts. Bureaucratic hurdles, such as lengthy approval processes and inter-departmental coordination challenges, contribute significantly to the slow pace. Land acquisition remains a persistent issue, particularly in densely populated regions, leading to prolonged legal disputes. Inefficiencies with contractors also add to the delays, with cost overruns and missed deadlines further complicating project timelines.
Indian Railways is lagging in the integration of modern technologies compared to global standards. While efforts to incorporate AI, IoT, and predictive maintenance tools are underway, the pace of adoption is slow due to funding limitations and an underdeveloped digital infrastructure. Inadequate technical capacity within the workforce also hampers the effective use of new technologies, making the transition towards a modern system more difficult.
Public-private partnerships(PPP) in Indian Railways have seen limited success, primarily due to policy ambiguities that discourage private-sector involvement. The complexity of Indian Railways’ bureaucracy, combined with unclear guidelines on revenue-sharing and risk management, has made it difficult to attract significant private investment. Questions around infrastructure ownership in PPP projects further complicate matters, leading to reluctance from potential investors.
Way Forward
In conclusion, the Railways (Amendment) Bill, 2024, marks a critical step toward modernizing India’s railway governance framework by integrating the Railway Board’s provisions into the Railways Act, of 1989. This legislative change is expected to enhance the Railway Board’s autonomy, streamline operations, and improve decision-making processes, which are vital for addressing the growing challenges of infrastructure development, technological advancement, and increasing demand for passenger and freight services.
However, operational delays, bureaucratic inefficiencies, slow technological adoption, and the complexity of public-private partnerships continue to pose significant challenges. Addressing these issues through improved policy frameworks, enhanced coordination, and greater private sector involvement will be essential for the Indian Railways to meet its modernization goals effectively. As the Indian Railways strives to become more efficient, sustainable, and responsive to public needs, the successful implementation of this Bill will play a pivotal role in shaping its future trajectory, ultimately contributing to the nation’s broader economic growth and development.
References
About the Contributor– Geetam Acharya is a Research Intern at IMPRI and an undergraduate student at Sri Venkateswara College, University of Delhi with a keen interest in Political Science and International Relations.
Acknowledgment– The author would like to thank Dr. Arjun Kumar, Vaishali Singh, and Aasthaba Jadeja, who helped throughout this article and reviewed the same.
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