Analysis of Indian Railways Industry

Chapter 1 Introduction

Today, Energy resource, Telecommunication, Transport are the basic infrastructural requirement which acts as an indicator to the growth of any Economy.

Transport includes road transport, air transport, water transport, and rail transport. Transport provides a useful link between production centers, distribution areas, and the ultimate consumer. If we talk about inland transport mode than the one biggest transport industry comes in the mind the – railways. We can not ignore the contribution of the railway to the growth of the economy with its incredible services like the mobility of various commodities and passengers. It is hazardous to imagine the Indian economy without railway. We always fill proudly and happy when we think that our Indian railway Asia’s first and world second largest after Russia under the single management.

We may also fill amazing by knowing that the Indian railway is the world’s largest employment provider organization. There are cities like Mumbai and Delhi where railway service is treated lifeline of cities. In Mumbai local trains services are popular and in Delhi metro train services are popular. In Mumbai, every day local trains carry 90 lakh passengers. That means if local trains stop, Mumbai also stops. So, we can understand the importance of the railway for a country like India.

Chapter 2  Nine Zones of Indian Railway

Indian railways have been divided into nine zones:

• Western railway
• Central railway
• Eastern railway
• Northern railway
• North Eastern railway
• Northeast Frontier
• Southern Railway
• South Central Railway
• South Eastern Railway

Covering the largest route length of over 63,000 km of total Indian boundary. The last station of the four directional boundaries is West-Mumbai, South-Kanyakumari, East – Guwahati, North-Jammu. It is the most convenient way of traveling if you are traveling on a budget. The railway has one of the most efficient communication systems between two stations.

Chapter 3 Organization Overview

The Ministry of Railways under the Government of India controls Indian Railways. The Ministry is headed by Union Minister who is generally supported by a Minister of State. The Railway Board consisting of six members and a chairman reports to this top hierarchy. The railway zones are headed by their respective General Managers who in turn report to the Railway Board.

For administrative convenience Indian Railways is primarily divided into 16 zones:

Chapter 4 History of Indian Railways

“ Indian railways are older more than 150 years ” In the year 1832 the first railway running on a steam engine, was launched in England.

Thereafter in May 1843 a young engineer, graham Clark got down from a ship harbored at Mumbai (then Bombay). He was sent to India at the insistence of the textile industrialist of Manchester, Lancashire, Liverpool, in England to find out how and in which part of India a railway can be built which would be useful transport cheap cotton from Indian hinterland first to Bombay harbor and then from there to England by ship. Thereafter on the 1st of august, 1849 the great Indian peninsular railways company was established in India. On the 17th of August 1849, a contract was signed between the great Indian peninsular railway company and east India Company. As a result of the contract, an experiment was made by laying a railway track between Bombay to thane (56 km).

On 16th April 1853, the first train service was started from Victoria terminus (CST) to thane carrying 400 people in 14 carriages, covered 21 miles (34 km) at 3. 35 PM. the time taken by the 75 minutes. This is not first in India but also in Asia. On 15th August 1854 the second train service commenced between Howrah and Hubli. On 1st July 1856, the third train service in India and first in south India commenced between Vyasarpadi and Walajah road, and on the same day, the section between Vyasarpadi and Royapuram by Madras Railway Company was also opened.

Chapter 5 Some Miscellaneous Facts about Indian Railways

The total route length of the Indian railway is approximately 63,000 km. The first electric train was opened in February 1925 on Mumbai suburban railway on Mumbai Victoria Terminus (VT) – Kurla branch line. As of 31st March 2004 the electrified route was 17,503 km. The Indian railway largest in Asia and the second-largest in the world after the USSR. The total number of railway stations in India is more than 7,000. Does the Indian railway operate approximately 7,525 trains daily covering 7,031 railway stations? The largest platform in India is at Kharagpur. The length is 2,733 feet.

It is situated in West Bengal. The longest railway tunnel is Konkan railway tunnel i. e. 65 km. The longest rail bridge is across the Godavari River. The length is 10,052 feet. ? The largest marshaling yard is at Mughalsarai. The third class in the Indian railway was abolished in 1974. Now there are seven classes- AC-1st, AC-2T, AC-3T, Sleeper, AC chair car, first-class and second class. Railway set up a fund in 1974 to give financial assistance to victims of railway accidents. As per the latest data, the Indian railway has more than 1. 5 million employees. The Indian railways have 7,817 engines, 46,119 coaches, and 2, 28,170 wagons. The steam engines are being phased out and diesel and electric locomotives are being introduced. As of 31st March 2004, there were 45 steam, 4,769 diesel, and 3003 electric locomotives. India’s first metro railway was opened in Kolkata on 24th October 1984. Rajasthan’s prestigious tourist train Palace on wheels, renamed the royal orient express, extended to Gujarat and the responsibility of its operation handed over to the tourism corporation of Gujarat. About 27 % of the total route km on the Indian railway is electrified. Computerized reservations increased to 92%. Prestigious Konkan railway (760 km) project has been commissioned. A new rail coach to run at a speed of 160 km per hour but 25% lighter than the conventional bogies has been developed by rail coach factory, Kapurthala. On November 23, 1999, after a gap of 25 years, a direct train link with Bangladesh was reopened. On December 24, 2002, the metro train service started in New Delhi.

Chapter 6 Story of Convertibility from Loss Earners to Profit Earners

Indian railways are managed under the public sector. The primary objective of the Indian railway is to provide welfare to the societies. For a long period of time in the past railway was suffering from huge losses. But from the last two years, this railway became a profitability undertaking.

This sudden change has attracted the attention of whole managers and various economists. That how it may be possible? This magical incident becomes possible due to the following reasons:

1. Excellent management under Laloo Prasad Yadav: Laloo Prasad Yadav became the rail minister of India in the UPA government in 2004. When Laloo Prasad Yadav took this responsibility then everyone was in the belief that to manage the railway is not capable of Laloo Prasad Yadav. but he managed the entire rail network very efficiently and he has done that work which was not imagined by anyone. In 2005-06 railways given the 13,000 Cr profit and in 2006-07 its profit reaches 20,000 Cr Rs. Under the excellent administration of Laloo Yadav. Laloo Prasad Yadav runs railway not as a minister but as a business guru. He applied various tricks that contributed towards the income of the railway without making an effect on overall passenger fare. Example: Indian railway increased the cancellation charged of traveling ticket from 20 to 40 without increasing the overall fare amount as a result when a passenger cancels the ticket he loses Rs 40 as a cancellation charge which adds to the profit of the railways but without hurting or irritating to any of passengers.
2. Optimum use of capacity: The past rulers were not using the full capacity of rails. This was the Laloo Yadav under who’s control this drawback minimized to some extent. As he started many cargo trains as double Decker. So that they can carry much commodity or luggage at once in the same overhead expenses. Such proper utilization of capacity increased savings by reducing average costs. 3. Growth in production and transportation of industrialized Goods: In India, many industrial units are increasing in the size as well as in the respect of volume of production. Such produce needs a market for selling the railway having a large network and huge carrying capacity is suitable for the smooth mobility of such commodities like heavy machines, building material such as cement iron rods.

So that they prefer to carry their commodity by rail which in turn leads to the earnings of the railways as a payment of freight charges.

Chapter 7 Locos and Coaches Manufacturing Units

There are six main production units under the railway: Chittaranjan locomotive works (West Bengal), established in 1950 for the manufacture of steam engines, and has since changed over to the production of electric engines. The diesel locomotive works at Varanasi (Uttar Pradesh) went into the production of diesel engines in 1964. Diesel component works have been set up at Patiala for the manufacture of components for diesel locos and important sub-assemblies. Integral coach factory, Perambur (Tamil Nadu). Rail coach factory, Kapurthala 9punjab0. The production of railway coach is supplemented by two public sector undertakings, the Bharat earth mover’s ltd. , Bangalore and Jessops & Co. ltd. Kolkata. In order to prevent the drain of foreign exchange on the import of wheels and axles for the railway, a wheel & axles plant was set up at Yelahanka, Bangalore in 1984.

Chapter 8 Problems of Indian Railways

In spite of all various advantages and specialties, we can not ignore that there are many serious drawbacks of Indian railways. They are as follows: Outdated technology of locomotive: The rail engines used to run the trains are very old and outdated technology. So they require much maintains and they do not give a proper return, as they do not perform efficiently. There is immediate need to change the engines by new and updated ones. Small and inadequate rail networks: As India is the world’s second-largest rail network country but if we look by considering the requirements of the economy and size of the country then it is not enough. Further India’s population which is increasing leads to pressure on such facilities. So there must be an extension in the rail networks as per the demand and requirements. The problem of financial crunch:

The railway is facing the problem of financial crunch. The conventional methods of increasing the net revenue, like the rising of tariffs and expenditure control are inadequate for generating the levels of investment required. The problem of social responsibilities: As the primary objective of the railway is the welfare of the public. So it has to operate a number of unremunerative lines, for example, Railway provides concession to students in the journey ticket fare up to 50% and for senior citizens up to 30%. Such a reduction in fare results in losses to the railway industry. Often essential goods like food grains, fruits and vegetables have to be carried at losses

Chapter 9 Highlights of Indian Railways Budget

Review of performance and revised estimates: record-breaking performance in the first nine months of the year 2005-06. Growth in freight loading and revenues is 10% and over 18% respectively. Loading target increased from 635 mt to 668 mt and freight revenue target increased from Rs 33,480 Cr to Rs 36,490 Cr.  Tenth plan target of 624 mt and 396 billion tonne-kilometers to be surpassed one year in advance. Passengers’ earnings, other coaching earnings, and sundry others’ earning increased by 19% and 56% respectively over the previous year. Ordinary working expenses to increase by Rs 1,200 Cr. Likely end year fund balance Rs 11,280 Cr. 9. 2 2006-07: Review of performance and revised estimates. Major technological upgradations planned.  New high capacity wagons being designed and manufacture of aluminum and stainless wagons planned in 2006-07. Payload to tare weight ratio to improve to better than 3:1, and thereafter to around 4:1. Transfer of technology to be encouraged and use of IT to be expanded.  Public partnership and public-private partnership to get a major thrust. Opening up of container segment well received, 14 applicants deposit Rs 540 Cr as registration fee. Permission to run private container trains to be given before 31st march 2006.

Measures to Improve Freight Business

Reduction in the unit cost of freight traffic due to an increase in the loading capacity of wagons and some other measures. Additional loading of 4 to 8 tonnes per Wagons per adds 100 Million Tonnes to loading capacity with resultant Revenue generation of Rs 5000 Cr.  Validity of brake power certificate for CC rakes increased from 6000 to 7500 km. Wagon manufacture to increase by about 25%. Production of the electric locomotive to increase by 17% and diesel locomotive by 5%.

Reduction of Losses in Passenger Business

Increase Volume reduced unit costs strategy to be adopted in the passenger business also. Cut down losses in the coaching services by about Rs 1000 Cr in the coming year and by 50% in the next three years by increasing the number of coaches and occupancy of trains, reducing travel time, and reducing losses in the catering and parcel segments. Over 200 mail/express trains to be made super fast. Journey time of a majority of the Shatabdi, Rajdhanis, and of certain mail/express trains likely to reduce. The number of coaches in about 190 popular passenger carrying trains to be increased up to 23-24 coaches enabling railway to earn Rs 200Cr additionally every year. Platform length at 200 stations to be increased at a cost of Rs 60 Cr. Up-gradation of lower-class passengers to higher class without any additional payment introduced on all Rajdhanis and mail/express train.

Reduction in Losses in Parcel and Catering Business

Policy of leasing out panty cars and catering units at large stations through open bids to continue. ? Capacity utilization of parcel business to be improved. ? Parcels can be loaded and unloaded at all stations where the half is 5 minutes or more and the leaseholders can themselves prepare the loading manifest. ? 150 kg ceiling for booking luggage in the brake vans removed.

The year 2006 declared as the year of passenger services with a smile strategy to shrink queues at booking counters.

Charges leviable on the issue of e-tickets reduced. E-tickets can also be bought through rail travel service agents? 800 more UTS centers to be opened. 200 Automatic ticket vending machines in Mumbai suburban area to be installed. Jansadharan ticket booking scheme- formulated to make available pre-paid UTS counters to unemployed youth. ? Under the Gramin ticket booking scheme, the agency being given at roadside stations to unemployed rural youth for issuing tickets.

Improvements in Passenger Amenities

All ‘A’ and ‘B’ category stations to be made model stations. The help of architects to be taken in all divisions to make stations building more beautiful, comfortable, and with a modern look. A modern facility such as ATM, cyber cafes, etc. to be provided at all major stations. A pilot for giving the publicity rights for an entire division to a single agency, through open tender.

Modern Facility in Passenger Trains

New technology LHB designs passenger coaches to be used in Patna, sealdah, and Rajdhanis also. ? Four popular trains to be provided with world-class passenger amenities and interiors.

Railway Safety

Overaged tracks and bridges and track circuiting work on all stations on A, B, and C routes to be completed by March 2007. Balance work under SRSF to be completed by March 2008. Renewal of asset becoming due after 2001 being sanctioned on a concurrent basis and executed. The number of consequential accidents comes down from 473 in 2001 to 234 in 2004-05.

Staff Welfare

Increase in contribution to the staff benefit Fund for the next year – nearly ninefold. 100 community halls to be constructed. ? While away from headquartering, food to be made available to running staff during duty hours at nominal rates. ? Quality shoes, socks, gloves, uniforms, necessary implements to all gang men or key men.

Chapter 10 Conclusion

Railway Electrification thus provides a modern, cost-effective, energy-efficient, environmentally friendly, safer, fast, and pollution-free mode of rail transport to meet the ever-growing demand for heavy freight haulage, high-speed passenger travel, inter-city, and mass suburban transportation. This system is also capable of using any form of primary energy including hydro, nuclear, thermal, solar, etc.

Consequently; it reduces the dependence of the nation on largely imported petroleum resources. At the current level of traffic hauled by electric traction is helping the nation to save diesel fuel worth Rs. 4500 Cr. It is worth mentioning that all the modern railways of the world have adopted electric traction. China although a late starter in matters of electric traction and having a railway system similar to Indian Railways is currently electrifying at the rate of 1000 Kms. every year and expected to surpass Indian Railways within the next two years.

Thus, Railway Electrification is a worldwide phenomenon and in the other developed and developing countries, the percentage of the electrified network to total network varies from 26 percent to 93 percent, whereas Indian Railways has reached only 27 percent. This indicates that Indian Railways have to go a long way in the field of Railway Electrification in serving the interest of national economy in the transport sector.

Chapter 11 Bibliography and References

1. General Knowledge at a glance by R. Gupta.
2. I. C. A. I Economic book.
3. Economic Times
4. Financial Express
5. http://www.indianrail.gov.in
6. http://en.wikipedia.org/wiki/Indian_railways
7. http://economictimes.indiatimes.com
8. http://www.trainweb.org/indiarail