Is there light around the corner?

The next rail budget is round the corner.

A commercial organization in monopoly in a sellers market in a nation inhabited by over a thousand and three hundred million should ideally have no reason to belie the expectations of its clients as well as constituents. Yet it has successfully belied the expectations of almost all it came in contact with during the last over three decades.

Where have we faulted and is there a salvation?

Is it not sad that I, a true railwayman to the core and fairly senior one at that have no expectations from the ensuing budget, and there may be many more of the same variety. Having been a silent witness to thirty three budgets in my career spanning as many years, I have learnt not to nurture hopes from such annual rituals. A ritual is what the budget has now become, a ritual that merely places the accounts of the current and the forecast for the ensuing financial year on the table along with a few sops for the public at large.   

A budget is meant to be a statement, a statement of the efficiency and purpose of an organization, of its goals and aspirations and of a new vision or direction. A budget of a commercial organization is expected to be a pointer of the direction that the organization is expected to take in the coming year and therefore should logically result in actionables that drive the organization to achieve the figures and also the intent. Unfortunately it has generally never been so.  

It is also true that for a developing nation like ours and an organization like the railways, mere announcement of intentions is not meant to be the end all. Intentions if not backed by a solid commitment of purpose can only serve as a temporary shroud for gains that can at best be short term in nature.

The convenient lack of clarity on whether we are a commercial organization or the sarkar itself has been the bane of this monolith, almost since the time the nation came on its own. An archaic and bloated bureaucracy, the nine verticals of which are often at war with each other would always find it difficult to deliver what the nation aspires for. Yet its sheer inability to restructure itself on commercial lines from the present departmental one has indeed been the reason behind the organization not being able to live up to national aspirations. The recommendations submitted on many occasions by eminent economists have been gathering dust in an organization that desperately needs to modernize and corporatize in the national interest.

It is also necessary that our processes, both for taking decisions as well as entering into contracts are simplified and brought at least at par with other governmental systems in the country, if not on total commercial lines. Yet, on the contrary, the over bloated bureaucracy that rarely differentiates between deliverance and remaining busy continues to make mountains out of molehills. 

If only the ensuing budget is not merely a statement of figures and a few announcements, but instead a statement of avowed objectives and time frames thereof backed by a resolve to take all necessary steps to achieve the same, the greatness of this organization would indeed be redeemed.

If only wishes were horses...................

Reforming Railways

There is absolutely no doubt that what we are staring at right now is a mess of an absolute order in the mammoth railway system of the nation, a mess that is also experienced with amazing regularity by the rank and file of the nation. Yet in the perception of a rank outsider the primary issue with the railways remains to be undue political interference by its own very minister.  Surprisingly this perception can at best be only marginally true.

It is a fact that the Indian Railways, a commercial (sic) organization in monopoly in a sellers market in an overpopulated nation has no justification to be in the state of affairs it is in right now. It is also a fact that despite its apparent negatives, the railways remains the most visible symbol of dynamic delivery in a nation where almost anything associated with the sarkari machinery is perceived as a symbol of sloth and inefficiency. In this backdrop, it is indeed a matter of concern that even a dream business scenario has failed in inspiring the railway system to strive for excellence and inadequate facilities and services in unhygienic and overcrowded stations and trains has over time emerged as its hallmark. This dichotomy in the environment and the performance apparently defies logic and needs to be appreciated before contemplating solutions.

Bashing of politicos has unfortunately emerged as the favorite pastime of the nation. Even the great Indian Railways has not been left unscathed in this regard, perhaps because this appears to be the easiest option that also appeals to the masses.  That the fundamental issues with the railways are an offshoot of its burgeoning bureaucracy that is heavy, complex, feudal and archaic yet well looked after has unfortunately remained under cover.

The separation of the rail budget from that of the general exchequer in 1924 had its genesis in the deep rooted philosophy of the then federal government that the operations of the railways being commercial in nature would flourish in a financial environment that is free of the controls normally inherent in government budgeting and expenditure systems. Notwithstanding this fine appreciation of commercial needs that the then powers to be displayed in abundance, considerable distortions in the last few decades have resulted in a total reversal of the entire scenario including the mindsets.  

Railways took root in India in 1853 and by 1947 it had extended to over 53500 kms, while the next sixty five years witnessed an addition of a mere 11000 kms despite advancements in technology and processes. At this juncture in the life of the railways, it is almost impossible to fathom that in a span of a mere twenty odd years that too almost a century and a half back, the entire golden quadrilateral was built. That all the five hill railways that are icons of engineering excellence could be built from scratch in around a decade each, around the turn of the nineteenth century also defies present day logic in times when even completion of petty works is regarded as a laudable achievement. The railways in the first hundred odd years were identified with rapid building of quality infrastructure and providing immaculate services to its clients. 

Where have we stalled?

In tune with the railway systems in the developed world where the railways arrived only marginally earlier our railway system was initially structured along departmental lines. While other railway systems changed/evolved with the passage of time, our railway system still continues with an archaic management and operational structure, the continuance of which defies commercial sense. Moreover the system has been considerably complicated and distorted to the extent that there is now a total mismatch between authority and accountability in all verticals at almost all levels. The situation is further aggravated by the presence of as many services as there are departments resulting in a scenario that the entire system has only departmental officers and not true railway officers. An overall view therefore almost never gets taken.

What needs to be done?

The absolute lack of clarity on whether railway is a commercial organization or a body like other ministries of the nation has always been a core concern. Logically however, its expenses being met by its own earnings convey an impression that railway is a commercial organization, an impression substantiated by the rising public expectations from its services. Unfortunately however its absolutely non commercial way of working has expectedly failed in living upto the expectations of the burgeoning middle class. Restoring commercial sense in its operations is necessary and merely having a commercial department is at best tokenism. This however would necessitate a concerted effort taken with clear short and long term perspectives in view.

In the short term, the ridiculous complexities and distortions in the decision making and contractual mechanisms would need to be addressed, besides putting in place a mechanism for a periodic rationalization of the fare structure that puts an end to the adhoc handling of fares. Simplification of procedures and empowerment of the almost disempowered functionaries at all levels is an obvious natural corollary.    

Concurrently long term measures that handle major structural and operational anamolies would need to be undertaken.

It is also true that the middle tier in the railways structure, the zonal headquarters have ceased to be of any positive relevance. Highly overstaffed with focus only on control and conformance, the headquarters offices should be the first bastion to be demolished in the interest of efficiency. For operational matters there needs to be one policy making body, a trim and efficient Railway Board and a single functional tier of divisional offices. The infrastructure and manpower vested in zonal offices at present can be put to better use.

We also need to pay an immediate heed to the oft recommended step of doing away with the plethora of services that presently exist and creating a single Indian Railway Service on the pattern of other services of the union.  The crying need to organize the entire structure on business lines after demolishing the present departmental structure would also need to be addressed. 

After ages we see light at the end of the tunnel, yet sunshine would engulf us only if we move forward.

Restructuring Railways

The ongoing debate on the IRSME site about the superiority of SCRA vs DR has me totally foxed. While on the one hand one longs for the much awaited IRS (Indian Railway Service), their is still a band of people who would prefer to continue with the divide in the mechanical cadre, one of the nine disciplines of the railways.

It is rather sad that the railways, unlike other sectors of the government, failed to evolve with the times and sadly so, for want of a strong decision maker have preferred the status quo since the time the country came on her own in 1947. So while the nation is managed by one service, namely the IAS, the railways is (mis)managed by nine, with each service having a narrow sectoral focus and none, none of its officers having the capability to take an overall view.

The separation of the railway budget from the general exchequer, sometime in the early nineteenth century was done primarily on commercial considerations. It was felt by the british that the railways being a commercial organization would need flexibility in its finances and hence this decision. Unfortunately the railways have emerged as an extremely rigid organization, more rigid that even the typical government departments, thereby nullifying the original objectives of this decision.

The contractual mechanisms and typical decision making processes in the railways are rigid and archaic. Perhaps this is due to the lack of a will to change, a situation that has occurred primarily due to the multiplicity of services on the system.

It is high time, the railways get a chief executive who looks beyond the narrow confines of his service and pulls us out of the abyss we find ourselves in.

Bleeding public sector!

PC Sen in his article “An airline hijacked” published in the HT of 9th May 2011 has hit the nail right on the head. Both Air India and Indian Airlines that were airlines of repute till a few years ago and are now collectively known as Air India have hit the dirt. The reasons for the same may be many, yet the inability of the management to succeed in a commercial sector that is growing rapidly and is also inherently profitable cannot be but decried. Similar is generally the case with all government run hotel corporations that despite being part of an inherently profitable sector generally bleed to bankruptcy.

My two stints as a public sector honcho, namely the short-lived stint at the India Tourism Development Corporation and later at the Madhya Pradesh State Tourism Development Corporation have reinforced my belief that the CEO positions in public sectors are primarily leadership positions. Any CEO who does not appreciate this basic premise is bound to fall flat on the face and that is what has been happening regularly in the Indian public sector scenario.

PC Sen has rightly mentioned that the employees are the key to success of any organization and any organization that does not place the welfare of its employees as its primary focus shall rarely succeed. Unfortunately this has been happening with amazing regularity at most of the loss making public sector enterprises. Otherwise how can one explain the rationale of major staff related decisions taken without actively considering the genuine concerns and anxieties of the people who have to run the show – the employees. And these concerns and anxieties can be appreciated only if the top management is transparent, does not live in an ivory tower and has a direct line with the staff.

My stint at the India Tourism Development Corporation coincided with the aggressiveness that was then being displayed in the disinvestment of the public sector and also the 9/11 incident which affected tourism worldwide. The combined synergy of both the events made the revival extremely difficult, almost impossible in the eyes of many, yet the rapid turnaround that the company witnessed in 2002-3 was the result of a massive team effort, a team effort that even the junior-most of the employees identified himself with.

The iconic success of the Madhya Pradesh Tourism in finding its place in the big league of Indian tourism and also the unprecedented financial turnaround of the state tourism corporation was fuelled by the same employees of the once beleaguered corporation, who were earlier being blamed for the mess that the state tourism corporation was in. Posting over 30% growth per annum by a state public sector undertaking that had already hit the bottom and was being actively considered for a sell-off again proved that a turnaround is possible provided the top guy has employee focus and is committed to the growth of the company.

Any commercial enterprise, be it the local pan ki dukaan or a towering corporation is only as good as its leader, or in other words its top guy. The top guy has to have leadership capabilities and by his words and deeds, should be able to command the unquestioned loyalty of his men. Everything else is secondary, yet unfortunately most of the top guys only look upwards and display extreme keenness to be identified as the blue eyed boys of the powers that be. Blue eyed boys they become, but they lose the company and that is what has happened with most of the commercial enterprises that have rapidly gone downhill.

The top guys also have to be able to distinguish between the “effort to deliver” and the “decision to deliver”. While the effort part is good and appreciable, the decision part is almost mandatory. Unless the company led by its top guy decides to deliver, the effort will almost always never bear fruit. It is also sad that generally, the top management gets busy in the “how” and remains busy in the same while the corporation continues its downhill slide. What the top guys fail to appreciate is that the “will” to turn around is far more important than the “how’s” and “why’s”.

And lastly, any commercial enterprise that works in a competitive environment, howsoever profitable the sector may be, has to have its foundations firmly in the ground, grouted in value systems that are universally accepted as good and also good practices. Corruption, drinking on duty, indiscipline and sexual harassment are ills, the eradication of which should remain foremost on the agenda of the top management that would invariably need to lead by example to succeed.

The public sector enterprises are businesses like any other, the only difference lies in the ownership pattern that is vested in the government. The success or otherwise of any business depends more on the top guy than on the ownership pattern and this is a hard reality that needs universal acceptance.

Amazing Railways!

Indian Railways never ceases to amaze me. The most visible symbol of dynamic delivery in the nation is perhaps facing one of its most severe financial crunch in recent times. A commercial organization that is in monoply, is in the sellers market and whose produce is something for which the common masses and commercial bodies are forever queing up, finding itself in financial distress is something that one is unable to digest.

And therefore expenditure control has become the buzzword, without realizing that revenue maximization, not expenditure control is the open secret of success of all forward looking commercial organizations. Expenditure control implies a clampdown on all aspects of expenditure with the exception of the bloated salaries that the federal government servants have undeservingly become accustomed to.

That all expenditure is not wasteful and thus cannot and should not be controlled is a realization that is conspicuous by its sheer absence. Such a measure that does not differentiate between investment and wasteful expenditure is bound to lead the railways into a downward uncontrollable spiral. The sad part is the total absence of an appreciation of the ground realities and the basic understanding of running an commercial empire. If only our focus was on revenue maximization and not expenditure control, things would have been very much different and easy.

Yes, empire we still are, but an empire lost in a time warp. Unfortunately we are slowly emerging as the most visible symbol of how not to run a commercial organization. It is equally unfortunate that the fundamental constraint in running a commercial organization, with constant selling prices and upwardly spiraling input costs, is not handled the way it should be - head on.

It is not that everything is wrong with the railways. We can still boast of one of the finest workforces and highly responsible trade unions in the nation. We still have reason to be proud of the non stop criss-crossing of thousands of trains across the subcontinent continuously, non stop despite all sorts of imaginable constraints.
One is equally proud of the fleet of outstandingly capable officers who are brilliant individuals but find themselves as a helpless cog in the system.

Yes, we somehow run trains, but we are equally capable of running the system with ease and then spend the spare energy in high quality physical growth of the system, something that is the call of the nation, the India of the twenty first century. If only we thought and also peeped out of the box!