THE CHINA MODEL

India under Railway Minister Suresh Prabhu is not alone in reforming its mammoth Railways. The sector has undergone a major transformation in neighbouring China as well. In 2013, China dissolved its ministry of Railways. In the process, it separated policy and regulation from commercial operations. A new PSU – China Railway Corporation or CRC – was formed to run trains purely on commercial lines, whereas the transport ministry would do all the policy and planning. China is now in the league of countries like Australia, Brazil, Canada, Germany, Japan, Russia and the US, which have unitary transport ministries at the central level.

Can India take a leaf out of this? Not likely. While the railway operations of the eastern neighbour are of similar scale to India’s, the issues might be identical and may require the same medicine, but the problem is that India is much slower in execution. India requires major investments to uplift the existing infrastructure. Plus, the Indian Railways has traditionally had a social obligation of providing cheap travel to the poor.

China also doesn’t have the kind of suburban or intra-region service networks that India has. Although CRC would be compensated if required to provide services that are not commercially viable, China actively discourages shorter distance passenger trips. Such trips, in many countries including India, form a loss-making business.

Then, unlike China, India requires access to technologies for modernisation and more strategic investments, such as FDI. To clear the current mess, more government patronage would be required. The Bibek Debroy Committee report, Rakesh Mohan’s India Transport Report, or Sam Pitroda’s report to modernise railways, among others, recommended that India run its Railways on commercial lines. Prabhu, too, wants to set up a holding company, on the lines of CRC and make all the railway PSUs subsidiaries. But this requires Prabhu’s reforms to take shape. Quickly.