Safety and Efficiency in Indian Railways

By B. S. D. Baliga

Summary

B. S. D. Baliga, a former Chairman of the Railway Board, delivered this lecture under the auspices of the Forum of Free Enterprise in Bombay on 10 May 1982. The pamphlet sketches the historical arc of Indian Railways from their 1853 origin as a vehicle for British import-export trade through the post-Independence consolidation of rates, wages, and through-traffic, and then turns to the operational and political pressures the system faces in the 1980s. Baliga argues that the network has handled vastly more traffic since 1947 with broadly improved freight efficiency, but that ageing rolling stock, chronic underfunding, and over-staffing have eroded passenger service quality and stretched safety margins.

The core diagnosis is twofold. First, the Railways are starved of capital: the Planning Commission has allotted only half the Sixth Plan demand, the Depreciation Fund has been chronically under-provided, dividends are paid on a never-revalued book capital, and political reluctance to raise rates and fares since 1967 has driven the system into the red. Second, the workforce has doubled beyond traffic needs, leave reserves, absenteeism, and an anti-management mood within trade unions make discipline and mechanisation hard to enforce. Baliga reads safety statistics — collisions and derailments mostly attributable to staff failure, the 1981-82 spike in fatalities including a 270-death NE Railway accident — as evidence that discipline and managerial autonomy must be restored.

Against this background, Baliga’s prescriptive frame is a classical-liberal one tuned to a state monopoly: he wants the Railways insulated from populism, freed to raise resources internally without Planning Commission ceilings, audited by a technical body modelled on Japan’s Director of Technical Audit or the US Inter-State Commerce Commission, and protected from political demands for uneconomic branch lines built to satisfy regional egos. He defends rail’s irreplaceable role in bulk and long-distance traffic for a populous, capital-scarce country, but insists that hilly and light-traffic areas are better served by roads, and that travel concessions and non-essential travel should be trimmed. The closing argument is blunt: only business methods, far-sighted pricing, and freedom from political pressure can give Indian Railways an efficient, economical, and safe future.

Key points

• Indian Railways began in 1853 as British capital under a guaranteed-return scheme, with lines built inland from Calcutta, Bombay and Madras to serve import-export trade.

• Post-1947 standardisation of rates, fares, wages and the telescopic system for through distance brought network-wide benefits, but staff strength has roughly doubled beyond traffic needs.

• Freight performance has improved markedly — originating loading reached 220 million tonnes in 1981-82, wagon turn-around fell to 13.5 days, and net tonne-km per wagon capacity rose 35% from 1950-51, second only to Japanese Railways.

• Passenger services have deteriorated in punctuality, cleanliness, catering and reservations; trains run with about 1,600 fewer coaches than required due to stock shortages.

• Accidents rose from 780 in 1976-77 to 956 in the first ten months of 1981-82, with staff failure responsible for 97% of collisions and 45% of derailments; safety drives are now lowering the trend.

• The Railways have been in the red since 1967 because political reluctance to revise rates and fares has left Depreciation Fund contributions and maintenance allotments inadequate against inflation.

• Baliga calls for a Director of Technical Audit on the Japanese model, freedom from Planning Commission ceilings on internal resource-raising, and revaluation of the capital base for dividend purposes.

• He warns that politicalisation and populism — uneconomic branch lines, peak-period over-crowding, ego-driven low-traffic routes — threaten the very survival of the Railways and must be replaced by business methods.

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