Sunita Awasthi
Western Railway
D.O.No.FA/CA/CON. Dt. 25.5.2002.
Dear Shri Rana,
Ref : Your D.O.No. 2002/W&R/30/CRB/5 dated 3.5.2002.
I am enclosing herewith a note with my
suggestions/views as desired. Many of
the issues commented on have been amply debated upon in recent years. Nevertheless they are considered so
important they can bear repetition.
Yours
sincerely,
(Sunita
Awasthi)
Shri I.I.M.S.Rana,
Chairman, Railway Board,
Ministry of Railways,
Rail Bhavan,
New Delhi – 110001.
Copy to: Financial Commissioner(Rlys), Railway Board, New
Delhi with reference to CRB’s D.O.No.2002/W&R/30/CRB/5 dated
3.5.2002.
Copy to General Manager, Western Railway for information.
Copy to Addl.GM
for information.
FA
& CAO
Enclosure
It is not
uncommon in many countries of the world
to find successful Business Organisations being headed by Finance
Managers. If the manager who controls
the purse strings is also the leader who controls the organisation, it is quite
likely that the Indian Railways may get a shot in the arm, a dose of the fiscal
discipline so very necessary for IR today.
The same results are also possible if a non-Finance executive Head
accepts the urgency to make the organisation finance conscious.
IMPROVING OVERALL EFFICIENCY.
First of
all Financial Efficiency. Once the
fiscal health of the IR is revived, the
rest is relatively smooth. An organisation
with an Operating ratio so dangerously close to 100 cannot be the envy of any successful business venture. Our Mantra and focus at all levels and at
all times must be -
I Increase
Revenue Generation
II Reduce
Expenditure and Costs
III Invest
judiciously.
I Increase
Revenue Generation
·
Our
efforts to study OD flows and production patterns is a step in the right
direction. We have to continue vigorous
efforts to increase our market share vis-à-vis production by keeping a close
watch on the rail coefficient of transportation of goods by Industry.
·
If
we have to grab our share amidst clawing competition, it is time the General
Managers got SOME flexibility in pricing (both goods and passenger services)
based on market forces and the principles of
Demand and supply.
·
The
Marketing and Sales organisation in the Railways to be given a high priority
like in the private sector. Our
marketing officers should function like marketing/sales managers out there in
the corporate world. May be
lateral induction of MBA graduates
could be considered.
·
Even
today with the limited powers/means available , a lot can be done to enlarge
our market, if the attitude of “treat it like your own business” seeps in.
·
Better
management of present assets (including land) is a must to make them yield
more.
·
Stop
leakages in Revenue (frauds, under charges, ticketless travelling) by
strengthening field checks and accounts internal check.
·
Collect
outstanding Railway dues. No business
allows so much money to go uncollected for years together, without interest.
II Reduce
Expenditure
Let us
refresh our memory with Para 116 (i) of
the Financial Code Vol. I. It says : “Every Government
servant should exercise the same vigilance in respect of expenditure incurred
from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own
money.”
Somewhere along the line this has been forgotten and
double standards are adopted vis-à-vis personal spending and public
spending. If the above advice is taken
seriously by the higher levels in the organisation there is no reason why
wasteful expenditure in many areas cannot be cut out.
·
There
are no two opinions that staff costs in the Indian Railways are
disproportionately high. Fortunately a
great deal of awareness has been created already and we are on the right track
of downsizing. There must be no let up.
Some other areas which readily come to mind where
expenditure can be pruned are :-
·
Policy
of Productivity Linked Bonus needs to be reviewed. – Can it be capped with a ceiling
? PLB amount has increased
tremendously, productivity has not.
·
As
experts have already pointed out, do we really need to expand our business
to non-core activities ? Even if we buy the argument that welfare
activities like Hospitals, Schools at remote stations should continue, the need
to hive off and outsource activities like printing press, Hospitals, Sanitation
Services, Security, and Schools in metro cities, remains. A good beginning has already been made with
Catering.
·
Number
of Railway Recruitment Boards to be reduced considering that staff intake is
now minimised.
·
Review
the continuation of the New Zones and stop sinking of further resources therein.
·
Multiplicity
of departmental training schools in Zonal Railways can be rationalised and reduced.
III Invest
Judiciously
We have
debated long enough, we have told ourselves for years that our Investment
policy is skewed and needs to be straightened out. It is now time to act.
·
We
are a poor nation, let us not fritter away scarce resources on irrelevant and
unremunerative projects (not benefiting
a major chunk of population). For the
next three years the policy makers could consider a freeze on all works other
than those directly related to Safety and those that are remunerative. Till we are steady ourselves financially,
our priority for sometime should be ‘Consolidate,……..
don’t expand .’
·
Once
the shelf of projects is reduced, available resources will be better utilised,
instead of being spread thinly. The idea is to prioritise the really important
projects and allot sufficient funds for their speedy execution.
·
Exercising
prudence in investment will also eliminate the need for huge market borrowings
at high interest rates. We now
have the IRFC experience behind us and
this should educate.
1.
Marketing
will be effective only we are able to sell ourselves effectively and have a
good product. In other words, there has
to be an assurance of quick, safe and hassle-free transportation and delivery of goods. Three things become
important in this context –
- Speed of goods trains to be upped.
- Run goods trains as per scheduled time table.
-
Simple
and minimum paper work.
2.
Unless
we have sufficient and attractive services, marketing for passenger services in
an over populated country like ours can be counter productive. The demand, as it is, far outstrips the
supply. Special passenger services and
packages in collaboration with ITDC
etc. with special fares in tune with the market/cost of service can of course
be marketed.
3.
For other passenger services also, it is time
that fares reflected real costs and
subsidy phased out gradually.
4.
But
if we increase the tariff there is the prime need for upgrading the quality of
passenger services. Instead of
introducing new services and new trains, the urgency should be to run the
already available services well. All
that the passenger wants is a Safe , Reliable, Quick and Clean service ( all
marks of professionalism).
5.
While
Catering is non existent or primitive in some sections, it is overdone in some
of the trains. It does not matter if we
do not provide a lavish spread. All
that the passenger expects is a simple and nourishing ‘travelling meal’ to
sustain. Also sometimes the quantities are unnecessarily over generous.
Improving
efficiency has a lot to do with “attitude”.
Correcting our attitude would improve the quality of service several
notches even with the available inputs.
Improvements in attitude to work by staff /officers =
better productivity.
Better attitude towards staff = Highly motivated work
force.
Quality of service is directly proportional to our
attitude to customers viz., Industry,
Travelling public and Internal customers i.e. other departments in the
organisation.
Isolated
computerisation in various departments has been the bane of Indian
Railways. However, we have by now made
some headway in FMIS, FOIS, MMIS and PMIS.
Once these integrated systems are in place, Indian Railways would have
become a fairly IT-enabled organisation.
Apart from the bigger systems of each department, each manager has
endless scope to get better organised through the computers.
Any simplification to cut through the bureaucratic jungle
of Rules and Procedures is always welcome and should be an on-going
process. However, this should be done
without sacrificing the basic essentials.
The vague
notion that delays occur mostly due to the Accounts Department need to be got
rid of. While Finance should no doubt conduct expeditious scrutiny and avoid
piecemeal queries, the following causes have been observed to cause delays :-
(a)
Proposals
are not well thought out and not enough homework is done by the
Executives. Finance notes asking for
essential requirements are treated with disdain and not readily complied with,
causing further delays.
(b)
Works
are often started without proper planning, proper drawings, sometimes without
an estimate or with a shabbily prepared estimate having no links with reality, leading
to revisions in estimates (sometimes more than one) resulting in time over runs
and consequent cost over runs.
(c) Punctuality
and discipline is not observed in the finalisation of tenders.
Tender cases coming to the TC
after expiry of validity are not uncommon.
It is necessary that fixed time schedule is strictly followed by the Convenor (who is the prime mover).
(d) One of the reasons for Time Lag in Projects is the unjudicious allocation
of funds for a plethora of half done projects.
Prioritise the few selected works and give sufficient funds to complete
quickly.
FA&CAO/W.Rly.