All-powerful CEO, end to department culture — How Railways restructure will reshape it

Vinod Kumar Yadav has been appointed Railways’ first CEO in its over 100-year history. Restructure also opens up posts of the board to all officers regardless of service they are in.

Railways' new CEO Vinod Kumar Yadav | Twitter

New Delhi: The Modi government Wednesday officially restructured the Railway Board, downsizing it from an eight-member body to a five-member one with the chairman of the board now assuming the role of chief executive officer (CEO).

Through an order of the Appointments Committee of the Cabinet (ACC), the government has changed the designations of the Railway Board members, and appointed Vinod Kumar Yadav as the Railways’ first CEO in its over 100-year-long history.

The restructuring, decided by the Cabinet in 2019, is part of a series of reforms undertaken by the NDA government in railways. They include the merger of the Rail Budget with Union Budget, allowing competitive operators to run trains, and merging eight of the railway services into one — a proposal that is expected to be implemented by November this year.

As the Railways gears up to function under a newly-reformed board, ThePrint explains what these changes would mean for the organisational structure and day-to-day functions of the national transporter.

An all-powerful CEO

In a statement on the decision to restructure the Railways services and the Board, the Union Cabinet in 2019 had said, “Railway board will no longer be organised on departmental lines, and replaced with a leaner structure organised on functional lines.”

After the implementation of this decision, the board will now have a chairman-cum-CEO along with four members responsible for infrastructure, operations and business development, rolling stock and finance.

The chairman, hitherto a first among equals, will now be the all-powerful cadre controlling officer responsible for human resources (HR) with assistance from a director general (HR).

So far, the board was divided vertically among services, with each service having its own member. The chairman acted as a first among the equals in the sense that each member was responsible for the functioning of their own department and cadre, and did not need to take the consent of the chairman to take key decisions. A member could take decisions on the transfers and postings of officers from their service without even having to inform the chairman.

With the chairman taking up the role of the CEO, he ceases to be a first among equals, and would be the face of the board with the Railway Ministry, and the government, with no decision of the board being passed without his consent. In case of a divided house, the CEO will have the authority to overrule the members.

Other changes

In addition, three apex level posts — member (staff), member (materials management) and member (engineering) — have been removed from the Railway Board, and all the remaining posts of the Railway Board are now open to all officers regardless of the service to which they belong.

What this means is that earlier only an Indian Railway Traffic Service (IRTS) officer could become a member (traffic) but now an officer from any of the eight services can become a member (traffic).

The move has both its supporters and detractors.

The officers supporting this move believe that it would end departmentalism in the railways, with each member thinking functionally and organisationally, rather than departmentally.

The detractors, on the other hand, feel that having a member for each service made officers of all the services feel represented at the apex level of the Railway Board.

However, since the government is working on a proposal to merge all the eight railway services anyway, supporters of this move feel it makes no sense in continuing to have members on service lines, and instead have a revamped Board wherein positions of members reflect the role they perform in the organisation.

Finally, according to the Cabinet decision, the board will also have some independent members who will be experts with “deep knowledge and 30 years of experience including at the top levels in industry, finance, economics and management fields”.

These independent members will help the Railway Board in setting a strategic direction.

Recommended by committees before

The reorganisation of the board is part of the government’s attempts to give a market orientation to the Indian Railways.

In its ‘Strategy for New India @75’, the NITI Aayog had identified it as one of the main problems in the Railways. “Delays in decision-making, inadequate market orientation and long project approval durations lead to slow turnover times, and delays in the implementation of railways projects,” it said in the document.

The government believes that through the restructuring of the board, and especially having measures like having a member responsible for business development, and the chairman acting like the CEO, the problem of the lack of adequate marketing orientation will be duly addressed.

In 2015, a report by a committee headed by former member of NITI Aayog, Bibek Debroy, had said, “Though this committee falls short of recommending corporatisation of IR, the Railway Board becomes a bit like a corporate head for IR. The Chairman of the Board should thus be like a CEO.”

“He/she is not first among equals and should therefore have the powers of final decision-making and veto (in the case of a divided view),” the report said.

Besides, several committees and reports have identified departmentalism as the main problem in the railways.

For example, the National Transport Development Policy Committee (NTDPC) report in 2014 had said, “The current structure encourages excessive departmentalism at the management level and often leads to priorities being set not for the organisation as a whole, but on departmental considerations”.

With the government now abolishing department-based posts at the apex level, and seeking to merge all railway services into one, this problem is expected to be solved in due course.

Apprehensions among railway officers

Yet, the decision has caused anxiety among several railway officers, who await the more controversial decision on the merger of eight civil services.

It is not clear yet what the rank of the CEO, who as chairman had the rank of ex-officio principal secretary to the Government of India — a rank above Secretary to GoI — would be. Besides, it is not clear what the rank of all members who were ex-officio secretaries to GoI would be.

Further, there are apprehensions of certain posts reserved for railway officers being opened up for other services.

The Bibek Debroy Committee report, two of whose important recommendations — restructuring of the Board and merging services — have already been accepted by the government, also recommended possibly opening up posts of member (finance and PPP) and member (HR and stores) for lateral induction.

Most significantly, officers continue to be anxiously awaiting the final decision of the merger of railway services — a decision that has led to an unrest among the railway bureaucracy.