Railway cadre unification cannot be a stand-alone reform

The Union Cabinet on 24th December decided to reorganize the management cadre of Indian Railways (IR), a step that will be consequential.

The salient aspects of the decision are the “unification” of eight existing Group ‘A’ services and reorganization of the Railway Board on functional lines. The reorganization of the Board will include the induction of independent members.

The backstory to the proposed reorganization of the management cadre and Board is the desire to neutralize unhealthy competition within departments of IR.

IR has a matrix organizational structure which is grouped according to departments and geography. The departmental structure is the one that dominates.

Of the the eight Group ‘A’ services which will be unified, five are engineering services and the remaining are accounts and logistics services.

The problem facing these eight services is “departmentalism”. Many expert committees set up to suggest IR reforms have identified this aspect as a problem. The last significant expert committee, which was chaired by former Niti Aayog member Bibek Debroy, said something similar in its 2015 report.

Simply put, departmentalism is an approach among the management cadre that prioritizes the department’s interests over IR’s interest.

IR’s management cadre also believes that it is a problem, according to the Debroy Committee’s report.

Granular details of the proposed unification are not available. Therefore, it may be reasonable to assume that what lies ahead is something similar to what Debroy Committee had suggested. Specialization at entry levels and mid-career empanelment in general management positions. Presumably, to suppress departmentalism, a shift to general management will be a permanent one for each officer.

This is an important change proposed by the union cabinet. But to get a sense of its possible impact, it is necessary to compare it with what was suggested by the Debroy Committee.

IR today faces a financial challenge, particularly after the implementation of the 7th Pay Commission Report.

To get a sense of the scale of the challenge, it is important to read the financial audit of IR for 2017-18 carried out by CAG.

CAG pointed out that IR converted a negative balance into a surplus. This was possible because IR, like the government, uses a cash accounting system.

The issue is not just about exploiting the gaps in the cash accounting system. The financial problems leads to postponing spending on renewal of aged assets.

Given the scale of IR’s current problems and future agenda, it is instructive to take a look at what the Debroy Committee suggested.

The Committee wanted a full package of reforms, of which cadre unification is one, to overcome challenges.

To illustrate, accounting reform was to precede cadre unification. The suggestion on  the sequence of reforms came after considerable debate and public feedback. While it is not cast in stone, it is difficult to see how IR will be able to overcome its challenges without looking at reforms as a full package.

DISCLAIMER : Views expressed above are the author’s own.

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