D.O.No.AEF/Mol/2002 dt.30.5.2002
Dear Shri Rana,
Sub: Improving efficiency of Indian Railways.
Ref: CRB’s
D.O.Letter No.2002/E&R/50/CRB/2
dt.1.5.2002.
…..
We, Finance Officers, are indeed happy—and also grateful to
know about your confidence in us. It
will only enthuse us to redouble our
efforts to sustain the reposed confidence.
While I am grateful to you for this open invitation to make suggestions,
I would like to mention that some of the suggestions may be controversial and
not be fully welcome. But betterment and improvement has emerged only from
controversial suggestions/actions. With
this perspective I indicate the following spectrum of suggestions.
l. IMPROVING EFFICIENCY:
Ø
Structural change:
Railway Board, which is the highest body of governance in
the Ministry of Railways, may be
restored to original status of an umbrella-body to lay down major principles
of governing the Railway system and issuance of instructions/ guidelines of
common aspects affecting all the Zonal
Railways. Today it is doing much
more than that by even daily monitoring of what is happening in the nook and
corner of Zonal Railways. Apart from
avoidable intervention--and also consequent delay in running the system in
Zonal Railways, most of the time this leads to confusion and also to an
attitude of looking up to the Board or leaving it to the Board for final
decision/arbitration.
Ø
Status of General Managers: GMs
are to be recognized of their status as Zonal Heads and also respected.
They may be elevated to the level of full-fledged Secretary to Govt. of
India to bring parity with the Chief Secretaries of State Governments with
whom they have to interact in the running of Railways and Ministry of Railways
and Board should repose full faith and confidence in them and be given
more powers. After all many of the GMs
manage a Revenue Budget of Rs.2500 crs plus and generate Earnings of over
Rs.3000 crs. But they do not enjoy the same freedom or discretion or
status of a CEO/COO in the private sector or even public sector.
Ø
Departmental Bias: There
is a feeling presently that many of the decisions in the Board are not taken
with the Corporate objective but with a departmental bias. This feeling has to be demolished and
confidence built amongst various departments in the Zonal Railways. Once there is more cohesion and unity of
purpose at the top, this will flow down to the bottommost in the Zonal Railways
also for overall benefit of the organization.
Ø
Use of Information Technology: All of us have experienced the potential of
Information Technology based management, be it monitoring tender cases, releasing of purchase orders
or supplies or posting of PF accounts or deficiencies noticed on the
track/rolling stock/other assets.
Major packages like FOIS, PRIME, AFRES and others being
developed/tested in the nominated Railways need to be implemented fully at the
earliest in all Railways. Reservation of Train accommodation, sale of
unreserved tickets etc., also can be planned for through IT. Monitoring of materials with field
subordinates is yet another area. Information Technology has to be applied in
more and more areas and take advantage of the explosion in this area both
within and without the Railways.
Ø Optimum
use of human resources: Railways
is a dynamic organization alert
all 24 hours a day. We have to
work more for the benefit of the
organization as also for the Nation. One measure of achieving this—which will
add to the overall efficiency of the Railways—is to increase the working days including for those in the
office. For, to-day with the 5-day-week,
there is lot of time lag in dealing with various cases in the
Administrative offices. This also
affects our valued customers. As we
know virtually no work is done may be in the month of August in some Railways,
October in some other Railways and December in all Railways due to holidays!
Ø
Divisional Gazetted Set up: Activities on the Railways have
bludgeoned over a period of time. But we still do not have a module for an
efficient set up in the Divisions.
Posts in various departments are generated out of workcharged
provision or on temporary basis and continued for decades together--many times without
timely sanction by the Board. So long as GMs are able to manage with
provisional payment of salaries, operation of posts without sanction goes on
irrespective of the source of these posts.
Even proposals sent to Board for
creation of Revenue posts—after all even posts created on
workcharged are doing work relating to
revenue with the expenditure—are not considered in the perspective but are being refused citing orders of Government of India. This is an area where we still do not
have any clear cut policy from the Board.
Ø
System and rule consciousness: Procedures codified through
Manuals and Codes are to be imbibed and put into practice by all departments without
the necessity for advice from outside bodies such as Audit, Vigilance
or Accounts. However in the context of
the emerging scenario to make Railways
part of the globalised free market environment, the Codes/Manuals, providing
bureaucratic procedures which hamstrung
quick decision-making, need to be rationalized and restructured.
Ø Fear of
Vigilance: Railwaymen are very proud to belong to a dynamic and
working organization. In fact this is
the only organization, perhaps after Army, which is alert all 24 hours of the
day. The response to a crisis is so fast and things start moving in the
direction to solve the crisis at the earliest.
The dedication is unparalleled.
We have seen hard cases of trouble shooting in locos/coaches so as to
ensure timely running of trains causing least inconvenience to the
passengers. These are being monitored
at the managerial level by Gazetted Officers at various levels. But, alas many
times for having taken a decision or for having done a kind of job or for
having taken a decision not to do a job, they are hauled up at a later
stage by the Vigilance department even in cases where integrity or bonafides
of the officer is neither questioned or questionable. How do they react? They go into the
shell. When they look for support from
the Organization, to their utter dismay, they find that the organization is
indifferent to their situation. In
the process we lose dynamic managers and officers with decisive bent of mind.
The casuality is Efficiency of the Administrative system. Unfortunately
and very regrettably Vigilance
department also goes by statistics.
This is an area for very serious thought and deliberations.
2.Delegation of powers:
Ø
Board
vis-à-vis Railways: This has to start from
the top, namely the Board and flow down. As of now most of the powers
are concentrated with the Board which affects efficient working in the Zonal
Railways. In most of the cases referred
to the Board decisions do not come and, if at all they come, they come after
lot of chasing and when the need for dispensation/sanction was sought for has
already disappeared! (Examples are sanction for station to station rates
for augmenting loading and thereby increase earnings.) They are also in such
bureaucratic dictum leading to further confusion only.
Ø
Sanction for station-to-station rates for
capturing new traffic/additional traffic in an effort to increase earnings
needs to be delegated to the Zonal Heads within certain pre-decided norms with
as little restrictions as possible if we are serious about marketing. In this
context a comprehensive circular on this subject was made out by the
joint efforts of Operating and Finance Departments of this Railway and sent to
the Board sometime in the middle of 2001 which is yet to be finalized in the
Board.
Ø
Even in respect of passenger traffic the Board and
the GMs should have some discretion for deciding on point to point fare for
attracting short lead traffic, subject
of course to satisfying norms for
introduction /operation of a train.
Experience is that even extension of a train to a farther destination
with the rake (to beneficially use long lie-over) has to be cleared by the
Board and during the interregnum the traffic disappears and we lose earnings.
Ø
For reimbursement of medical expenses, the
powers delegated to Zonal Railways are too meagre leading to too many cases
being referred to Board. This is
because of the cost of treatment in the referral hospitals with whom Zonal
Railways have agreements. Number of cases referred to the Board also
have increased because of the increased longevity of retired Railway
employees who also have been brought under Liberalised Health
Scheme. The powers need to be wholly given to GMs or otherwise atleast
be suitably enhanced to reduce the
number of cases going to Board.
Ø
As of now payment of honorarium to individual
employees beyond Rs.10,000/- is to be sanctioned by the Board and this monetary
limits were fixed in 1996. Although the
Railways have reduced the incidence of honorarium, still the honorarium paid to
the cashiers after implementation of Vth Pay Commission scales need sanction of
Board. Since the threshold and the rate
of honorarium are fixed by the Zonal Railways, the powers to sanction honorarium may be fully left to the Zonal Railways.
Ø Within the Railways: This is a continuous process and already a good
number of items on this railway have been released from the pre-requisite of
prior finance concurrence. Powers of lower formations have also been liberalized from May 2001 (the old
SOP was issued in l987). However, given the
scarcity of funds and to act as disincentive to not-so-serious proposals,
certain powers need to be pegged at higher levels. Also, various levels of
sanction ipso facto build in “Checks and Balances” necessary to put break on over enthusiasm. Fine-tuning the SOP to
eliminate avoidable upward movement of files can however be considered.
3. Concern
for cost and economy:
Ø Deep application of thought should precede initiation of
expenditure proposals. Rake Links, TTE Links and Vehicle (Procurement /
Repairs) – to name just a few. Fundamental cannons of financial propriety and
the benefits both administrative and financial likely to accrue need to be the
sine-quo-non.
Ø Staff
strength needs to be reduced to bring down the mounting wage
bill and pensionary liability. The Efficiency Cell under SDGM generates a host
of studies suggesting changes in system, procedures and methods focusing on
cutting cost and saving manpower.
Similarly, Internal Audit Cell and Traffic Costing Cell in FA&CAO’s
office too carry out special studies on various facets of work. The
departments need to look into the
suggestions contained in these studies objectively and without prejudice
or departmental bias. It is often seen that these Studies are summarily
rejected merely because it hurts the department at the immediate moment and in
the short term. It requires attitudinal change and broader outlook to place
the corporate benefits as paramount.
Ø To supplement these studies, every
department will have to continuously monitor and review existing systems
and practices in the changed context of operations, administrative
decisions to hive off or shut down certain activities and injection of better,
failsafe and improved technology. Such conscious efforts positively contribute
for overall efficiency.
Ø The
concept of bench marking and an attitude to adopt the best bench mark in each of the work area has
to be consciously developed in the Zonal Railways. This will call for
recognizing the yardsticks as
maximum and not the minimum as is the present thinking in the executive
departments and unions. (This will incidentally reduce the total cost as well).
ØRedundancy
in a department should not be pushed under the carpet for fear of losing
manpower and readjustment among departments for cost control should be
considered as a first option. For instance when conventional passenger coaches
are replaced by MEMU services, adjustment of staff between Mechanical and
Electrical departments should substitute creation of posts. Policy formulation
should provide for this. (In the Accounts department of this Railway, we
have identified redundancy and in principle have decided to surrender 200
posts in the ministerial cadre, of which physical surrender has been
around 100 posts, the rest to follow in due course).
Ø
Desisting from “Empire Building”—it is common
knowledge (though
we may not want to admit it) that
each department resorts to expansion of its size to further career progression
and other interests. In the process,
overall interests and corporate objectives are lost sight of. This needs to change.
ØWelcoming informed analysis on major deficiencies pointed out by C&AG
through Draft Para / Provisional Para is to be seriously addressed with an objective
mind to see that remedial action is taken to correct the system and plug
loop holes as they are pointers to wastages, system deficiencies or loss of
revenue. Attending to them will augment
the earning potential and improve efficiency of the system in general. Efforts
taken to deny the points made by Statutory Audit can as well be gainfully
employed for betterment of the Railway System.
Ø Serious analysis and corrective action by
the concerned departments on the various parameters compiled by the
Statistical and Analysis wing, such as SFC/SEC and other statistical data
on Rolling Stock and other assets, will help immensely.
Ø
Hiring of vehicles for
daily use and gradual condemnation of all office vehicles on age basis will
reduce the requirement of drivers and all attendant expenditure on both
maintenance and repairs to the vehicles (a fraud prone area) as well as salary,
OT and TA/DA to the drivers (and their pensionary liability).
Ø
Full utilization of Plan Funds is to
be ensured to realise the avowed benefit as early as possible. Many times what happens is use of
substantive funds in procurement of stores meant for various projects leading
to financial progress but little
physical progress. It has also been found that funds are utilized
for the normal expenditure of running the office with a bulky bureaucracy without
any work on the field. Investments should be guided by ROR or safety
considerations and nothing else.
Ø
Sanction of lump sum works both at Divisional and GM’s
level needs more serious attention with the emphasis on prompt execution and early completion.
Experience has shown that not all works sanctioned by the DRMs on lump sum
basis were absolutely necessary as some of these got dropped with the efflux of
time. At one count in March 2000 on this Railway, the Divisions had 1566 works sanctioned on lump sum basis
(Less than Rs.15 lakhs each) requiring an outlay of Rs.105 crores over the
next 5 years! Works costing between
Rs.15 and Rs.50 lakhs were 119 in number and requiring Rs.36.66
crores for completion! This is no planning.
Ø
Provision of Plant
and Machinery for locosheds located in the same station many times lead to
duplication of costly assets. For
example a new electric locoshed located
in a station which already has a diesel locoshed also provides for costly wheel lathes and finally end up with one on either side of the compound
wall or a few metres apart.
Ø
Identification of non-moving items of stores and its
disposal can save in many ways and cause efficiency. Cost of holding inventory should be analysed and the large establishment
of stores depots should be revamped. Inventory holding should be reduced by
development of ‘Dedicated Supplier’ and ‘Just In-Time’ concepts so that the
cost of holding inventory is minimized.
Ø
The issue of Compassionate appointment is to be re-looked into. We have to recognize that the family pension has been
considerably gone up in financial terms and how Pension liability in general is
cutting into Railway Finances.
Compassionate appointment to wards of the deceased employees adds to the
working expenses for a good part of 30 to 35 years. It is also to be recognized that with the pension scheme in
place, the ward, who is appointed on compassionate grounds, will also continue
to get pension and thereby be a perennial burden on the Railway finances. While there can be no two opinions need for
showing compassion, we also know that we are not able to immediately offer
appointment due to various constraints and difficulties. A different system -----but
cheaper------needs to be put in place like a slabwise lumpsum payment in addition to normal retirement benefits based on age at the time of death and stop all
compassionate appointments. After all
deaths do not occur only in Railways.
Board’s instructions to offer appointment to wards even 20 years after
the death of the employees is too lax a provision and needs to be removed.
4.
Cutting delays / time lags:
Ø
Usually, it is observed that there is lack of adequate
attention while framing proposals and half-baked information is
furnished. These invite avoidable back-references, which are attended to quite
leisurely (Clarifications take anything from a week to 6 months or more).
Delays can also be attributed to insufficient planning and exploration of
field conditions, delay in preparation of plans and drawings, unrealistic
estimation of quantities and rates – all these compound the delay by
changing the scope and objective of the work. It also calls the bluff to the
(unfair) charge that Finance Department is to blame for the delays. There is
need to dispel the belief that proposals can be pushed through without full
facts and data. Fancy proposals when referred back do not return proving
that these were an initial unjustified. Survey Reports, Project Reports and
Detailed Estimates should therefore be prepared more earnestly, sincerely and
faithfully to minimise cost overruns and time overruns.
Ø
Similarly, Tender Schedules for award of contracts
to outside agencies need to be prepared after careful thought and application,
particularly after Sudhir Chandra Committee Report, to avoid variation and
expedite completion.
Ø
Internal
delays in every department is tolerated without any accountability. Finalisation of plans is a classic
example. No two departments are able to
sit across and finalise the plan, be it a new yard plan or modification to the existing plan or
whatever Exercises of joint sitting etc., also need no fruitful
results. These are further compounded
by new ideas emerging from new incumbents when there is a change of guard and
also by application of mind by everybody at HQrs after the plans have been
cleared at the Divisional level by all concerned departments. As an organization this aspect has to be
taken note of by all concerned. (In the Accounts Department on this Railway
a l0-day review mechanism of pending cases in the Stores Finance,
General Finance and Claims of staff and customers in the Divisions has been
introduced and seen by the Principal FA himself. This has increased the tempo of clearance and the cases
outstanding at the end of l0 day period is very minimum. This is not a self-proclamation but has been
acknowledged by the Executive departments.
(Evidences enclosed).
Ø
It has been
emphasized by the CRB that every department is a customer of the other
department and vice-versa. We, in
Accounts Department, have been following this philosophy and have helped the
Railways. An area in which we practiced this and gained is clearance of
Station Outstandings. Periodical
meetings between officers of Accounts and Commercial Department at the
Headquarters are led to sorting out
large number of difficult cases to the
mutually advantage of both the departments. Proof of the pudding is in eating as they
say. When the Financial year 2001-02 closed, the Station Outstandings came
down from Rs13.54.crores at the beginning of the year to Rs6.82 crores
only, a clearance of Rs.6.74 crores.
This was possible by cracking
hard nuts of old vintage. We
also have a system of monthly meetings at SAG level for tackling C&AG reference
of various kinds to serve the interest of the departments as also self
interest. I have also set a philosophy
of my officers at their initiative discussing cases
5.Building system on faith:
Ø
It bears repetition
that departments are to be
faithful to the Codes, Manuals and other Administrative decisions/orders. From this angle it is to be ensured that
proposals are not undercast or split up so as to keep them under the powers of
sanction by lower authorities. In such situation the delegation given will
betray reposed faith. They should also
be faithful vis-à-vis the others.
Ø
Delegation of powers is based on a system of faith on
various functionaries bestowed with such powers. It is expected of them to
exercise these powers with utmost care and having corporate goals in mind. Very
often these guiding principles are breached leading to aberrations. Naturally,
faith gets discharged. Similarly, disturbing attitudes have come to light in
the course of examination of Establishment and other proposals raising serious
doubts about the efficacy of faith. Faith is also shaken by the non-fulfillment
of certain conditions of sanction/concurrence granted in good faith on grounds
of urgency. A case in point is sanction for replacement of vehicles subject to
grounding and disposal of condemned ones, where even after purchase of new
vehicles old ones continue on road, after repairs!
Ø
Augmenting earnings: There is an urgent need to review all passenger concessions.
Restriction needs to be placed on the number of journeys performed by Freedom
Fighters with escorts. Commercial
exploitation of resources like land, buildings and air space should be put on
high octave path.
Ø
The evolving scenario vis-à-vis our
customers brings into focus to re-orient ourselves to the type of service being
rendered like basic facilities at the points of interface with them and also
the general attitude of our frontline staff like TTEs, Conductors, station
managers etc., relating to passenger traffic and commercial staff in the parcel
and freight earning areas. The annual
ritual of Courtesy Week etc., does not seem to have given the dividend expected
since the frontline staff do not conduct themselves as responsible
representatives of Railways vis-à-vis rail users.
Ø
To sum up, we have to go back to the
profound quote of Father of the Nation who said that we are there because of
the customer and not vice versa and it is the corporate responsibility of this
huge organization to imbibe this spirit both in words and deeds amongst all
Railwaymen. To achieve this the various
aspects like delegation of powers, simplification of rules and procedures,
working methods and systems and a gamut of other bureaucratic methods need to
be re-invented in right earnest. This will call for lot of combined efforts shedding
the departmental bias which appears to be the base of our working and the
sharpness with which it is practiced will prevent materialization of your dream
of finance officers heading the Railways one day.
(N.
KRISHNAMURTHI)
Shri I.I.M.S. Rana,
Chairman,
Railway Board/New Delhi.
Copy to: Shri S. Murali,
Financial Commissioner (Railways),
Railway Board, New Delhi.