salient features of indian railways_prasoon

8/3/2019 Salient Features of Indian Railways_prasoon

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Turnaround of Indian Railways

Submitted By

Prasoon Garg

Sec B

10BSP0920


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SALIENT FEATURES OF INDIAN RAILWAYS

Indian Railways Worlds third largest railway network It is prime movers to the nation.

Approximately 65,000 km of rail tracks and over 7,151 railway stations. IR owns a fleet of

2,22,379 wagons, 42,441 coaches and 7,910 locomotives. It runs 16,0251 trains, including

9,550 passenger trains, carrying about 1.6 million tones of freight and about 15 million

passengers daily.Indian Railway is Prime infrastructural sector. Perform the dual role of

Commercial Organization and Vehicle for fulfillment of social obligations It as part and

parcel of the total receipts and expenditure of the Government of India.

SWOT ANALYSIS

Strengths

The Biggest Company in the world in terms of employee strength, palace on Wheels is a

major part of income. It connects different cities and countries .It is luxurious and affordable

to common man. It has seen technological advancement.

Weaknesses

Corruption within the department, lack of accident proof magnetic wheels in all trains, lack

of safety,poor infrastructure,delayed trains,non pro-active employees.

Opportunities

METRO in a commercial city like Mumbai,development in small cities,profit through

privatization.

Threats

Low cost airlines,improvement of other infrastructure like roadways,could be taken over by

airlines.

The essence of the turnaround was in the fact that

(i) Total revenues increased by a significant percentage in the last three years, and

(ii) The net revenues continued a robust upward trend.

This is not only due to the rising trend of performance, but also due to the significant growth

in the past two years.

Some of the key strategies the Indian Railways adopted were

Downsizing

The number of employees, which peaked at 1.652 million in 1991, was brought down

progressively to 1.472 million by 2003, and to 1.412 million by 2006. One of the elements of

retrenchment strategy is to trim off excess staff. The approach that the IR adopted was not to

fill in vacancies created due to retirement or other reasons.


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Outsourcing

Besides the catering and parcel service activity, the IR also outsourced advertising activity. In

the other business areas of parcel, catering and advertising, the strategy of outsourcing

through public private partnership and wholesaling rather than retailing was adopted

Product InnovationThe IR introduced double stack container trains on some diesel routes. These containers

increased the carrying capacity of each train to 2,500 tonnes against 1,500 tonnes, and also

reduced line capacity constraint by nearly half and led to saving of about seven percent on

capital cost and 25 percent in operating expense. Further, it introduced new design of wagons

with higher pay load (carrying capacity) but lower tare weight (weight of the empty wagon)

that improved safety features. The effect of these measures can be seen in higher freight

revenue.

Rise in demand

The rise in freight revenue - the main plank of the IR turnaround. IR raised the freight on iron

ore by 17% by properly utilizing of freight sector ,Indian Railway carries a huge variety ofgoods ranging from mineral ores, agricultural produce, petroleum, milk and vehicles. Indian

Railways makes 70%of its profits from the freight sector

Decisions Taken in Budget

Safety Initiatives: IR created a Special Railway Safety Fund of Rs. 170 billion to improve

safety environment, through replacement of over aged railway assets, that is, tracks, bridges,

rolling stock, signaling gears etc.

The number of accidents have been more than halved from 473 (2001) to 200 (2007). Use of

high technology for passenger safety (train safety devices like Train Protection and Warning

System and Anti-Collision Devices).

Security: Railway Protection Force was strengthened to escort passenger trains in security

sensitive areas.,cleaner trains,book stalls,reducing journey times,increasing bogies,special

measures for women commuters

Schemes introduced

Engine-on-Load, terminal Incentive Scheme,Electronic Payment Gateway,Wagon Investment

Scheme,Non-peak season incremental freight discount scheme,Loyalty Discount

Scheme,Commodities have been moved to higher brackets iron ore, fertilisers and

petroleum products being some examples. A congestion charge has been put on specific

commodities. In addition, the Railways have raised the maximum permissible carryingcapacity of its wagons by two to eight tonnes.

Other Changes introduced

Tatkal(instant) - reserved tickets

In the last three years, the number of tatkal seats more than doubled.

In 2005-06, the daily average number of berths in tatkal quota was 43,000. The next

year, it increased to 57,000 and in 2007-08 raised further to 98,000.


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Tatkal revenue for the Railways almost doubled from Rs 200 crore in 2006-07 to Rs

396 crore in 2007-08.

No slack season (February-March and August) for trains that see high purchase of

such tickets 80 per cent and above of the quota .The tatkal quota in such trains has

been kept higher than others.

Motivation of Railway employees

Changes in organizational culture from politicized decision making to commercial, business

oriented decision making, facilities for licensed porters,crew friendly drivers cabins and

brake vans were designed, establishment of International Railway Strategic Management

Institute in 2005,Participation of Railway Employees in Management (PREM),corporate

Welfare Plan, Staff Welfare, sports club,evolved a system of ensuring managerial

accountability, Performance based rewards.

Results of strategies adopted

Internal revenue generation increased from Rs 6,902 cr in 2003-04 to Rs 13,612 cr in 2005-

2006.The operating ratio improved from 92% in 2003-2004 to 83.7% in 2005-2006. Therailways transported freight weighing 667 tones in 2005-06, a 20% increase over the last

year. IR generated a Rs 13,612 cr with 1.422 million employees on its rolls, ignoring the

recommendations of the Rakesh Mohan committee which emphasized on having a thinner

organization. More effective use of manpower led to improvement in staff productivity.

Revenue per staff witnessed a rise by 68 percent (2001-2006) as against 49 percent (1996-

2001).

salient features of indian railways_prasoon

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