On December 4, Union Minister of Railways Ashwini Vaishnaw tabled the Railways (Amendment) Bill, 2024, in the Lok Sabha. The Bill seeks to grant statutory powers to the Railway Board and enhance the functioning and independence of the regulatory body.
“The Bill intends to amend the Railways Act, 1989, to enhance the powers of the Railway Board and improve operational efficiencies,” Vaishnaw said.
He argued that the railways as an organisation was separated from the Public Works Department (PWD) and the Railway Board Act was enacted in 1905 during the British rule.
Later, the Railways Act was enacted in 1989 by repealing the colonial-era Indian Railways Act, 1890. However, the Railway Board continues to function through an executive decision without any statutory sanction. Vaishnaw added that the Bill is intended to bring more efficiency to the Indian Railways.
The fine print of the Railways (Amendment) Bill, 2024
One of the biggest changes the Bill intends to make include changing the way the Railway Board is constituted. The proposed legislation seeks to set up an independent regulator for Indian Railways, which will grant autonomy to railway zones and improve the finances of the state-run carrier.
New Railway Board appointments
The central government is looking to repeal the Indian Railway Board Act, 1905, and incorporate its provisions into the Railways Act, 1989. As per the Statement of Objects and Reasons of the Bill, the proposed legislation will simplify the legal framework and reduce the need to refer to two laws.
Under the Indian Railway Board Act, 1905, the central government invests its powers in the Railway Board. The Railways Act, 1989, regulates various aspects of the functioning and administration of the Indian Railways. It provides for the division of Indian Railways into zones for administrative ease.
If Parliament passes the Bill, the central government will suggest the numerical strength of the Board, its members' qualifications, their experience and terms and conditions of the service. The ruling dispensation will also propose the procedures of appointment for the Chairman and members of the Board.
Independent regulator
The Bill, which retains the current organisational structure of the Indian Railways, also includes proposed measures to improve functioning of the largest employer in India, with over 1.4 million employees. It aims to set up an independent regulator and also give more powers and autonomy to zones.
In 2015, the Committee on Restructuring of Railways had recommended setting up an independent regulator to safeguard the interests of stakeholders and promote competition. The panel had suggested that the regulator have powers to regulate various aspects such as tariffs, safety, access to railway infrastructure for private operators, and technical and service standards.
Autonomy to zones
The Bill aims to address the long-standing demand for increased autonomy over budget, sanction of funds for infrastructure works and recruitment of personnel to railway zones.
Earlier, several committees had proposed decentralisation of powers to zones.
In 2014, the Sreedharan Committee had recommended that financial powers need to be devolved to the zonal level. The move would have granted the zones more autonomy to make decisions on project tenders on their own without approaching the Railway Board.
Similarly, the Committee on Restructuring Railways had also observed that zones should be allowed to make decisions independently. It noted that this measure would have ensured healthy competition between zones and make them accountable for both their transport output and profitability. Once the zones are awarded autonomy, the Railway Board could function like a corporate board of a company that decides its own policy.
Providing autonomy to zones would also help the central government to improve railway connectivity in the Thawe-Gopalganj region of Bihar by sanctioning and extending super fast trains in this zone.
The Bill introduces Section 24A into the Railways Act, 1989. This section allows the central government to sanction the running, extension or diversion of super fast trains through the Thawe Junction. This power is granted notwithstanding the existing provisions of Sections 22, 23 and 24, which typically require extensive safety inspections and other procedures before any new rail services can be introduced.
The amendment is specifically designed to facilitate the extension of the Arunachal Express (train no. 22411/22412) via the Siwan-Thawe-Kaptanganj-Gorakhpur route.
The Bill indicates that the proposed amendments will result in additional expenditure from the Consolidated Fund of India. The Bill estimates that an annual recurring expenditure of Rs 250 crore will be needed to maintain the extended and new services. There will be a one-time non-recurring expenditure of Rs 300 crore for the necessary infrastructure upgrades such as track extensions, station renovations and other allied costs.
Improving finances of the Indian Railways
The Bill proposes to improve the finances of the Indian Railways by increasing participation of private entities in various aspects, including manufacturing of good train wagons, station and terminal operations and running of freight trains such as container trains. It also proposes that passenger fares be rationalised after the recommendation of multiple expert committees on the sensitive issue.
Vaishnaw said a total subsidy of Rs 56,993 crore is given every year to all categories of passengers, with a 46 per cent rebate on every ticket.
Opposition parties oppose govt's move
Congress's Member of Parliament (MP), Manoj Kumar, raised concerns about the Bill, stating that its passage could undermine the autonomy of Indian Railways amid opposition parties' fears of a privatisation move.
Opposition members said the central government should not privatise Indian Railways as it will hurt the interest of poor people. They also demanded that concession for senior citizens be restored. Revolutionary Socialist Party (RSP) MP, NK Premachandran, urged the central government to consider the proposals to revise the age ceiling for senior citizens as that existed in the pre-Covid-19 pandemic period, and restore old stoppages.
Similarly, Samajwadi Party’s (SP) MP Neeraj Maurya also said the government should have sent this Bill to an all-party committee for deliberation. He said the central government should look at ways to monitor the functioning of Railway Board. Trinamool Congress's (TMC) MP Bapi Haldar and Aazad Samaj Party (Kanshi Ram) MP Chandrasekhar Azad also expressed concern that the Bill could potentially lead to basic powers of the Railways being weakened further.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
