Rakesh Mohan Commitee on Indian Railways 2002

More than a decade ago, the Rakesh Mohan Committee observed that Indian Railways over the past decade (1991-2002) has fallen into a vicious cycle of under investment, mis-allocation of scarce resources, increasing indebtedness, poor customer service and rapidly deteriorating economics. The root cause of the decade of decline is an unstable political system increasingly driven by short-term political compulsions.

• This committee came up with radical suggestion of corporatization of Indian Railways. It suggested, that Indian Railways must eventually be corporatized into the Indian Railways Corporation (IRC).
• The government would need to set up an Indian Rail Regulatory Authority (IRRA), which would be necessary to regulate IRC’s activities as a monopoly supplier of rail services.
• IRRA was necessary to distance IRC from the government. IRC would be governed by a reconstituted Indian Railways Executive Board (IREB). The government should be in charge of setting policy direction and constituting IRRA and IREB.

The report suggested that once the broad framework of a proposed restructuring is accepted, the Government of India and the railway ministry would need to set up a special task force to frame new legislation enabling a new organisational framework. This task force would have to commence operations with a thorough review of the Indian Railways Act and the Indian Railway Board Act.

New legislation would need to be drafted so that it:

• Mandated corporatisation of the Indian Railways into IRC
• Permitted a revamp of the Railway Board
• Redefined the relationship between the government and a revamped IREB
• Provided for exemption from taxation (excise, sales tax, and so on) for the period of transition, say five to seven years
• Permitted private participation in railway operations
• Facilitated the induction of personnel form outside the railways
• Mandated the subsidisation of social responsibilities to the extent of funds provided by the government
• Set up a social safety net to take care of surplus labour

These recommendations were made 13 years ago and we can make out that these were radical and politically, ahead of their time. The report was not liked by the entire railway establishment and was soon thrown in the dustbin.