Indian Railways at the Crossroads
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Case Details:
Case Code : ECON005
Case Length : 15 Pages
Period : 1990 - 2004
Pub Date : 2004
Teaching Note : Available
Organization : Indian Railways
Industry : -
Countries : India
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ECON005) click on the button below, and select the case from the list of available cases:
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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“Indian Railways is one of the most studied institutions on the planet. For
almost every conceivable question that can be asked, there already exists a
comprehensive and vigorous report that lays out the facts and indicates the
answers. What is striking, however, is that there has been little action on
the many reports that IR has commissioned, both internal and external.”
-The Indian Railways Report: 20011.
Introduction
Indian Railways (IR) was the largest railway network
under a single management in the world. IR was often called the
'lifeline of India', because it provided a source of livelihood to a
large number of people and brought long-distance travel within the reach
of the average Indian. IR was also the largest employer in the world,
directly employing about 1.6 million people (as in 2003). In addition to
this, it was estimated that it provided indirect employment to over
seven million people. One survey in the early-2000s revealed that one in
every ten Indians depended on IR, for his livelihood, directly or
indirectly. IR carried, on an average, 13 million people across the
country everyday. |
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IR operated as a department under the central government of
India, headed by a minister of a Cabinet rank. Such was the significance of IR
in India, that it was the only department that presented a budget to the Indian
Parliament2, separate from the annual general budget.
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However, by the late-1990s, IR was at the crossroads.
An inability to reconcile its social and economic objectives, a growing
number of accidents and the burgeoning importance of airlines and
roadways that ate into its market share, burdened the operations of IR
and caused a decline in revenues.
Analysts felt that it was time for a system-wide overhaul of the
faltering organization, which had experienced relatively little change
from the time it came into existence in the late-19th century. It was
felt that privatization, partial or complete, would be the best solution
to IR's problems. However, privatization had some inherent difficulties
which made it an unviable option for a government department of the size
of IR. |
By the early-2000s, IR had realized the need to keep up with
the changing socio-economic scenario in India and had begun implementing a
number of schemes designed to improve operations.
Indian Railways at the Crossroads
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