Railways (Amendment) Bill 2024

Context: The Lok Sabha passed the Railways (Amendment) Bill, 2024. The Bill was passed five months after it was introduced on the Floor of the House.

Relevance of the Topic:Prelims: Key aspects of the Railways (Amendment) Bill, 2024. 

Background:

• The Bill aims to repeal the Indian Railway Board Act, 1905 and incorporates its provisions into the Railways Act, 1989.  
• The Indian Railway Board Act, 1905 enabled the central government to invest in the Railway Board with powers and functions under Indian Railways Act, 1989.

Key provisions of the Bill:

• Powers of Union Government: The Central Government will prescribe:
  1. the number of members of the Board
  2. the qualifications, experience, terms and conditions of service, and manner of appointment for the Chairman and members of the Board.

• Statutory Status: The Bill proposes to amend the Railways Act, 1989, to provide statutory backing to the Railway Board.
• Independent Regulator: The Bill proposes to establish an independent regulator to oversee tariffs, safety, and the participation of the private sector in the Railways.
• Autonomy to Zones: The Bill proposes to improve operational efficiencies and decentralise powers, granting greater autonomy to railway zones.

Key Impact:

• The current Bill proposes to simplify the legal framework by incorporating the proposals of the Indian Railway Board Act, 1905 in the Railways Act, 1989. This will reduce the need to refer to two laws. Instead reference will be required only to one law.
• Establishment of an independent regulator would give encouragement to private participation by protecting the interests of stakeholders and promoting competition. This in turn would attract investment, increase efficiency in operations, and improve service standards.
• Autonomy to zones would grant them flexibility and space to make decisions on project tenders for their zones without approaching the Board.
• Statutory backing to the board would streamline its functioning with better efficiency and autonomy.
• The amendment is expected to speed up the approval process for train services that will help meet pending demands from various regions.
• The Bill will allow the government to fast-track infrastructure and superfast train operations.

Why was the amendment needed?

Indian Railways was envisioned as a commercial undertaking of the government, with an additional social responsibility to make transport services accessible and affordable to the public. Over the years, Railways has faced persistent challenges such as: 

1. High operating costs due to significant salary and pension expenditure
2. Continued losses from its passenger business due to underpricing
3. Under-investment in capacity augmentation (infrastructure development) due to poor surplus generation and limited private participation 
4. Network congestion and cross-subsidy for passenger services reducing its freight competitiveness.

The opposition alleges that through this bill the government is trying to take away the autonomy and has an aim to privatize the railways. Whereas the government argues that these steps are essential to make railways modernize and financially viable as the proposed amendments are in line with the recommendations made by various committees like The Committee on Restructuring of Railways (2015) and The Sreedharan Committee (2014).