Key challenges ahead of Piyush Goyal as he becomes the Railways Minister

Piyush Goyal was inducted into Prime Minister Narendra Modi's cabinet as the Railway Minister in the cabinet reshuffle which took place on Sunday.

He was elevated to the cabinet from his prior position of being the Minister of State for Power, New and Renewable Energy and Mines. He acquired the Railway Ministry portfolio replacing Suresh Prabhu who confirmed his resignation through a tweet.

Thanks to all 13 Lacs+ rail family for their support,love,goodwill.I will always cherish these memories with me.Wishing u all a great life

Story continues below Advertisement

Remove Ad

— Suresh Prabhu (@sureshpprabhu) September 3, 2017

Here are some of the key challenges Piyush Goyal is about to face as the Railway Minister in the cabinet:

# The Indian Railways have always been questioned on issues of safety with many reported rail accidents in the recent past. The Indore-Patna railway derailment in 2016 killed 65 people alone in 2016 while the Utkal Express derailment in Uttar Pradesh in 2017 claimed around 23 lives and injured many.

A report in the Economic Times says that India had topped rail accidents in 2016. Until August, there were at least seven major accidents reported in Railways which could prove to be major challenge for Piyush Goyal as safety concerns is one of the key issues to be on the radar for the new Railway Minister.

The World Bank on Saturday released a report which said that the current system of accident investigation by the Commission of Railway Safety is inadequate and must be replaced with a dedicated safety management for an efficient accident prevention method.  Indian Railways data as on March 2016 show that 66 out of 105 accidents happen due to the negligence of railway staff.

Watch | India's Bullet Train Ambitions

#As the 39th Railway minister, Piyush Goyal will also be struggling with a host of challenges as far as operating ratio is concerned, bringing the faith goes back amid coal losing its sheen and improve the food quality.  The CAG has been saying that the food is not fit for human consumption.

#Apart from improving various aspect of the Indian Railway’s. Goyal will also have to make sure that Prime Minister Narendra Modi's pet project of Bullet trains takes off in the scheduled time.

#Railway Finances is also a major point of concern for Goyal as the Railway Ministry has suffered poor operating ratios in the past. The annual rate of cost has not been able to keep pace with the revenues generated in the Railways Ministry.

In April to December 2016, the Railways reported an all time high operating ratio of 109 percent, which means that for every Rs 109 expenditure, it generated Rs 100.

In the Union Budget of 2017, Finance Minister Arun Jaitley had allocated  Rs 1.3 trillion for Indian Railways, with a gross budgetary support of Rs55,000 crore

According to a report to the Standing Committee on Railways on safety and security submitted in December 2016, the Railway's share in the overall GDP is just 1 percent. Goyal surely needs to work his way through that.

#The government has already lined up around 9 rail public service undertakings (PSUs) for the initial public offer. The listing of PSUs like IRCTC, IRCON, and IRFC in the Bombay Stock exchange and National Stock Exchange is likely to happen soon.

In the Budget announcement of 2016-17, the government announced its plans for the disinvestment of selected PSUs in the Railways Ministry. The step is going to be problematic for the Railways which have always remained under the government and is certainly going to prove as a challenge for the Railway Minister.

# The Delhi-Mumbai freight corridor and the bullet train project has been undertaken by the Indian Railways and is still underway, requiring a lot of attention and work from the Railway Minister.

The National High-Speed Rail Corporation has taken up the project for bullet trains planned for Mumbai-Ahmedabad, Delhi-Kolkata corridor among others. These are the massive projects which are pending and Goyal needs to closely scrutinise them.