Bibek Debroy Committee: Main Recommendations and Challenges

Bibek Debroy Committee: Main Recommendations and Challenges

Question: Restructuring the Indian Railways is a difficult proposition. Discuss the recommendations of the Bibek Debroy committee on restructuring the Indian Railways and the challengers underlying this.

Final report of the Bibek Debroy Committee on restructuring Indian Railways has proposed a process of gradual reforms

They have made the following salient recommendations:

• Introduction of commercial accounting practices

• Greater decentralisation of powers

• Allowance of entry of the private sector

• Establishment of independent regulator

• Improving accountability

• The panel has set a 5 year timeframe for implementation of recommendations and elimination of Railway Budget

• Regarding the recommendation of the independent regulatory body, was to establish it statutorily and not executively; this will ensure the independence of the regulator and improve its accountability

• Powers of the Ministry are limited to setting policies

• Committee has based recommendations on three pillars: commercial accounting, HR changes and independent regulatory authority

• Responsibility for implementation of recommendations should be with the Minister alone

• Railway Budget should be phased beyond 5 years, with general budget support to Railways

• A most transformative recommendation was allowing private companies to run trains

• Exposing railway production units to competition will be the result of opening out private investment through transparent accounting processes

• Another recommendation was separation of activities such as running of hospitals, schools, real estate development, catering, manufacturing of locomotives, coaches and wagons from the core business of running trains for the Indian Railways.

• The Committee also recommended that GRP/Government Railways Police should be funded by State government entirely

• GMs should be given the freedom to choose between RPF and private security guards for security on trains

Challenges:

• Recommendations relating to opening the private sector and establishing an independent regulatory are challenging

• Restructuring will be a massive task as will liberalisation for the entry of private players

• Privatisation and deregulation have not been recommended by the committee

• Setting up an independent regulatory authority outside the centralised Railway Board will be a tough proposition

• Railways is under invested and its viability is a question mark

Facts and Stats

• The 7 member Bibek Debroy Committee was formed in September 2014

• It has made recommendations for the restructuring of railways and resource mobilisation under NITI Aayog member and veteran economist Dr. Bibek Debroy

• Other members of this committee include:

- K M Chandrasekhar,
- Gursharan Das,
- Ravi Narain,
- Partha Mukhopadhyay,
- Rajendra Kashyap,
- Ajay Tyagi
- Ajay Narayan Jha.