Railways may soon be having an independent regulator, thanks to Debroy committee

Renowned economist Bibek Debroy headed panel set for improvement of the Indian railways has suggested an independent regulator for railways. As per a news report in The Economic Times, the panel submitted the over 300-page report to the railways ministry last week and the ministry is expected to present it to Prime Minister Narendra Modi for consideration before the ball is set rolling. The employees' unions and the opposition parties reacted sharply to the report, interpreting it as an attempt to privatise Indian Railways in the name of liberalisation.

"This is not a report and not a government where you should expect that all recommendations are accepted on a given day and then nothing happens over the next 20 years," Debroy told the financial daily. "Implementing the report is a series of incremental steps, so you will soon have an announcement of an independent regulator and a first step in that direction will be drafting of the bill."

According to Debroy, the committee has proposed setting up of a statutory regulator that will be independent, answerable to Parliament and not to the Railway Boards. "There has to be legislation for this, which will require amendment to the Railways Act and the Railway Board Act. This will take at least three years," said Debroy.

He said it is better to take three years to set up a statutory regulator rather than setting up a regulator with no powers in one month through the executive process. Commenting on the extent of changes that can be expected after the report is implemented, Debroy said the problems of Indian Railways were not created in two years but six decades ago. "Probably nothing will change in the next five years if you see as a customer of railways. The recommendations are building for a change that will happen 15 years down the line," he said. It will take three years for the report to be accepted and implemented, he said. Debroy shrugged off the criticism of the unions and the opposition parties, saying that even the existing railways policy envisages participation of private players in the sector.

"Entry of private players into Indian Railways is already part of the railway policy and a whole range of services on trains, be it catering, cleaning of toilets and stations or providing security, are already privatised," he said.

Besides, the public statements of the unions suggest they are not opposed to commercial accounting, unified entry of officers and decentralisation while there are mixed opinions on the independent regulator. "Yes, they are opposed to private entry, at least their public statement said that, but the other way to look at it is that the unions agree with 80% of the recommendations," said Debroy. The report has suggested five big things to be done in the next five years to reform Indian railways.

Besides setting up an independent regulator, these include breaking down the silos for unified entry to future entrants, introducing commercial accounting on a pilot basis in the first two years, endorsing private entry in the railways and taking up the existing practice of decentralisation to beyond the level of general managers.

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