The ancient parable ‘blind men and elephant’ has found resonance with the Narendra Modi government which is all set to junk the ‘silos’ or departmental approach plaguing the Indian Railways, according to Railway Minister Piyush Goyal. Instead of eight railway board members for traffic, rolling stock, traction and engineering, the newly constituted board will have five members which will include members for operation, business development, infrastructure and finance among others, he said.
In keeping with this awakening to the potential of wholesomeness as against watertight compartmentalisation of the national transporter, the Indian Railways will now have only one cadre, Indian Railway Management System, instead of the current eight services for various departments, including engineering, traffic, mechanical and electrical.
The Railway Protection Force (RPF) and Health Service would be the only two surviving departments after this reorganisation, with all other services being manned by personnel from the ranks of the Indian Railway Management System. There will be some ‘outside talent’, comprising independent members, being experts with over 30 years of experience, helping the board set a strategic direction. These changes hopefully would be completed within a year.
There could be two views on this paradigm-changing move that puts the Indian Railways on a track away from the one it has traversed all along for the last 150 years. To be sure, successive committees including the most recent one Bibek Debroy Committee in 2015 have in the past urged ending of the silos approach to the Indian Railways. But nevertheless, the demerger enthusiasts may cavil at the impending move.
In the private sector, demerger or corporatisation of departments has been on the ascendance. In India, the example of carving out Tata Consultancy Services Ltd (TCS) from Tata Sons Ltd, the family holding company of Tatas in 2004 is often cited as a telling example as how to bring out a potential winner from the cocoon and shadows of a monolith. TCS has indeed been a success story once it emerged from the shadows if not from the influence of Tata Sons so much so that it has been in a neck and neck race with Reliance Industries Ltd (RIL) for the largest company by market capitalisation honor. Demerger theory is a natural corollary and adjunct of the core competence theory to which conglomerates are an anathema.
The demerger theory, however, has its downsides and detractors. It encourages mini-empire building tendencies that could be inimical to the wholesome growth and health of an organisation. The government feels that there were eight blind men (read members of Railway Board) a la the six blind men in the parable who worked for the exclusive benefit of their own mini empires. It seems to have plumped for a unified approach with the top governing body imbued with an altruistic, overall vision, eschewing tunnel vision. The various services the Indian Railways depends on, in its worldview, should all come from within. If the departmentalisation is a no-no for it, demerger of corporatisation of departments must be an even more vehement no-no for it!
It is difficult to be judgmental about the government's worldview. It is significant to note that the Cabinet approval for the reorganisation of the Indian Railways by downsizing the Railway Board does not envisage disturbing Indian Railway Catering and Tourism Corporation Ltd (IRCTC). The IRCTC’s recent IPO was a roaring success further testifying to its phenomenal role as a model service organisation with an efficient portal that has transformed the way Indians book their tickets, travel and eat while on wheels.
By leaving it alone, the Modi government is sending the right signals—it is not opposed to the idea of demerger of profit centers, the ones having a public-service focus. But it will not allow departmentalism to mar the much-needed unified approach in solving organisational problems especially when the various service departments have no scope for being stand-alone companies, able to generate their own revenue given the monopsony character of the Indian Railways.
(The author is a senior columnist and tweets @smurlidharan)
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Updated Date: Dec 26, 2019 13:14:50 IST