Debroy committee suggest privatisation of trains

New Delhi: Even while stating that it does not favour privatisation of the Railways, a high level committee headed by Bibek Debroy has suggested opening up the national transporter for private players.The committee in its report has claimed that it favoured liberalisation in the Railways whereby the subsidy burden should be shouldered by the Centre and an independent regulator should fix the passenger and freight fares.  

The Debroy committee has also suggested that the practice of a separate Rail Budget be done awaywith and in place, the ministry of railways should focus on core business and separate the other peripheral activities.It has argued for exposing existing production units of Railways to competition from private sector so that they face competition, besides putting the units under a special purpose vehicle known as Indian Railways Manufacturing Company.

“Once the changes of the first five years are implemented, including the resolution of the social cost issue, the Railway Budget should be phased out with gross budgetary support to Indian Railways mentioned as a paragraph in the Union Budget and no more. Describing “decentralisation of power in loss-making Railways as the biggest necessity,” said Mr Debroy, while claiming that Indian Railways works in “silos” which needed to be broken.

The largest railways union, the All India Railwaymen Federation, has slammed the report, saying that it has showed the roadmap for eventual privatisation of the railways. It has stated that if the government embarks on implementing the report, the rail workers would oppose. The railway unions have attacked the report saying it is a clear road map for privatisation of Railways which would endanger safety and increase financial burden.

The panel has argued for separation of activities like running of hospitals, schools, catering, real estate development, manufacturing of locomotives, coaches and wagons from the core business of running trains. It has suggested that state governments should be asked to entirely fund Government Railway Police (GRP) and the general managers should have the freedom to choose between private security guards and RPF for security on trains.

Explaining the rationale for the report, Mr Debroy claimed that it was based on five “building blocks”, which included entry of private players, decentralisation, breaking down of silos in which the Railways works, transition into commercial accounting and creation of an independent regulator for the PSU behemoth.