Bharatiya Rail The Largest Railway Network In Asia Commerce Essay

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Bharatiya Rail (BR) is the largest railway network in Asia and the second largest in the world after USSR, but it is the largest one under a single management system. BR is well known as "The lifeline of the nation" because; the BR serves millions of people every day to reach them to their destination throughout the country. BR is also employed the large number of direct employee, which is around 1.6 million and it refer the BR as the worlds' largest employer. Except of the direct employee the BR also gives employment to about seven millions people indirectly. In the early -2000s a survey shown that in every ten Indians, one is dependent on BR directly or indirectly for his living. The Indian Railway carries about 13 million people every day across the country.

BR operates as a ministry department under the central Government of India, headed by a cabinet rank minister. The BR has a great importance in the Indian economy; the BR is the only department that presents budget to the Parliament separate from the annual general budget. (Source: Center for Management Research India, Available from:

The BR now giving importance to increase the volume of genuine ticket holder. In India the number of passenger without proper ticket is very high, and the BR is now concentrating on the regular checking and high amount of fine and higher punishment for the without ticket passengers. BR is now also running special checking operation to arrest the illegal passengers. In this way BR is now trying to minimize the number of illegal passenger and secure the revenue.

Another initiative of the BR is to look on the popular route and make arrangement for more passengers and for this strategy the BR introduce train with more coach, it means with the almost same cost they can carry more passengers, that will help them to get earn more revenue. After this where needed they started new trains according to the demand.

Unit cost reduces: BR's strategy also includes reducing the unit cost, which means the minimization of cost of production and service. To implement this strategy the BR is using different policy. As it is a government organization and in India the government organization always has the employee beneficial policy, therefore the BR cannot think also about the pay cut of the employee to reducing the cost.

As it has been discussed in the previous point that the BR now increasing the number of coaches in the train to avail maximum passengers with lower costs, for example normally BR runs a passenger train with 8 to 10 coaches but now they increase it to 12 to 14 coaches, it means if a 8 coaches train modified to 14 coaches train than that train can run with little higher costs and large amount of extra passengers. This policy is very profitable rather than run a new train.

Share benefits with the customers: The Bharatiya Rail driven with a public beneficial strategy. The BR always has the strategy to serve the people at its best. The BR reduced the ticket price for consecutive three years from 2005 to 2008 as the profit of the BR increased. Other than the fare facility the BR offers different benefits to its consumers. Some of them are old age benefits, Hotels and holiday home facilities in different tourist spot, entertainment and amusement park in several cities, sports stadium and center in throughout the country etc.

Strategic Issues:

HRM of the org:

Industry Analysis: The Bharatiya Rail is a department of the central government and the premier transport organization in India. In the rail transport sector the BR has the monopoly and the major percentage of Indian people prefer the railway for their travel needs. Besides these positive sides the BR has some problem also and need to restructure the system. The ministry has a proposal towards the future which can be inferred as the vision or goal of the organization. Bellow the proposal has mentioned, which was announced by the ministry of railways.

Vision 2020 & Strategic move: The Railway Ministry announced a large investment of 14 lakhs Crores Indian Rupees in ten years or 1.4 lakh crores Indian Rupees on annual basis under the scheme of Vision 2020. Every time talks about the organization movement it is expected to develop the strategy, program and organizational structure to achieve the goal. Vision 2020 has introduced three important strategic apparatus or the railway growth over the next decade. First component is to separate the double line corridor for the passenger and freight transport. Second is to increase the speed of train from 130 to 160 - 200 kmph range, and the third is to introduce four high speed bullet train service with speed of 250 - 350 kmph range. (Source: Word Press, Available from:

Organization Restructure: If the Ministry wants to implement the Vision 2020 properly then the organization would be need to change the organizational structure for effective decision making, efficiency and performance. Since independence, the BR has not introduced any noteworthy new route and just continuing to build the British legacy. Now the required things are to introduce new routes, create new infrastructure, new technologies and find out the new means and source of funding and investment for the further development. (Source: Word Press, Available from:

Corporatization: The Railway is working is a department of the central government of India. For the development and achieve the Vision 2020 the Railway should be converted to a public sector holding company with board of director headed by the CEO or Executive Chairman. The command to the company should be for establishing and operating the railways network efficiently & effectively and make excess revenue for reinvestment in existing and new projects. The government funding through budget with operational subsidies on definite sectors and activities must be accepted for first ten years till new model stands.

Providentially for the Bharatiya Rail, it is not any problem to find markets with the continuous growing population. BR just needs to be aggressive with other alternative options of transportation through technical up gradation and passenger beneficial focus.

Therefore, the Bharatiya Rail restructuring should be aimed at focus on development of infrastructure, technical development and operational efficiency. The first two aspects should be handled through Strategic Business Units, as they have strategic importance. Operational efficiency is the weakness of the Bharatiya Railways and therefore operations restructuring should aim to improve. (Source: Word Press, Available from:

Strategic Business Units: The most noteworthy approach to run the Bharatiya Rail in future should engage in division of ownership & management of infrastructure & technology development and operations. The restructure process should be done to manage three strategic apparatus of Vision 2020 discretely with three Strategic Business Units (SBUs). This is that for setting up two SBUs to set up new and manage existing infrastructure to dedicated corridors for passengers and freight separately. The strategic vision to increase speed levels needs to be moved by the separate SBU for renovation and technological up gradation of existing infrastructure of the railway networks. Reasonably, the same SBU can set up infrastructure for high speed bullet trains. This restructuring of infrastructure & technology would give a unique strategic identity and view for accomplishment of the Vision 2020. (Source: Word Press, Available from:

Public Private Partnership: Public Private Partnership (PPP) has been accepted by ministry of railways and railways board for a certain limited and selective aspects. To take shape an option, we have to look at road transport network which are one of the important and efficient mode of transport today. The roads and highways network infrastructure is owned and set up by the government. But the continuing stock on the roads is owned by the thousands of companies both private and public sectors and also millions of individuals. This small difference is a significant driver of efficiency & productivity. Can the government not adopt & adapt the similar model, suitable to continuing stock for Bharatiya Rail?

The scheme 'Own Your Wagon' has been in operation in a very limited manner. It would preferable that a separate subsidiary company, like "Indian Railways Rolling Stock Company" (IRRS), under the holding company, which would own the rolling stock, transport the cargo & passengers and the user of the infrastructure of the Bharatiya Rail's network. IRRS can have the 99 or more year lease for using the network with exchange of lease rentals which is to be paid to the respective SBUs for providing railway infrastructure and technology along with required maintenance services. Therefore IRRS should have focus on only operations. SBUs of infrastructure & technology would be responsible for their individual activities at their own costs, that can be recovered through rentals and annual maintenance contracts fees from IRRS.

The IRRS must be that entity for partnership of private and public sector with the Bharatiya Railways. The fund raising can be happen by selling share and long term bonds to the public, so that the rolling stock will be indirectly owned by the millions of shareholders and thousands of corporate firms. For strategic reasons IRRS will have only controlling interests through equity share from the holding company. The result of this approach would allow the political concern to give concentration on budgeting only for investments in infrastructure & technology on one hand and on the other hand operational subsidy. It has no need to say that the operation must be generating sufficient revenue to make up for the costs and make excess money. It is easily understandable that the sensitive decisions like passenger fares and freight charges must be decided in greater public interest and therefore a factor of some selective subsidy cannot be avoided. (Source: Word Press, Available from:

SWOT Analysis: The SWOT analysis of the Bharatiya Rail (BR) are as follows:


In respect of the employee strength Bharatiya Rail is the world 'Biggest Organization' - The human resource strength helps the organization to start any new project without any problem of manpower. The large human resource also helps the organization to extend any part of the organization and if any recruitment problem arises then keep running operation with the help of existing employees.

Palace on wheels - This is a luxury train which offers a very luxurious journey to visit different places in India. This is a very big source of income of the Bharatiya Rail, as the major percent of the customer of Place on wheels are from outside of India then through this service the company earns a very big amount of money.

Connects different cities - The Bharatiya Rail connects different cities in the country. As the major portion of the Indian people are from middle class or lower standard financial conditions, then to visit other places rail is the only suitable means of transport which is cost effective too.

Luxurious and affordable - The Bharatiya Rail offers luxurious journey in comparatively lower price than other means of transport. The one of the luxurious train 'Rajdhani Express'has different class for different types of people and their fare structure also made consider with the common people.

Technological advancement - Throughout the entire rail track the optical fiber facility already started by the Bharatiya Rail, it means in any place one can go through rail he/she will be connected with the others through internet. People can do their work during travelling. Instead of this the phone facility also available in train service. Other than in train service, the booking of the railway ticket can be possible through internet and even through mobile text service. Therefore technological advancement bring people more closer to the Bharatiya Rail.


Corruption - Corruption within the department is the very big weakness of the Bharatiya Rail. As all in Indian government sector corruption is the big problem, therefore the Bharatiya Rail is not any exception. To the high Political level and top level management to lower level clerk, everywhere corruption has hit and it affect the organization and its profitability badly.

Accident proof system - Though the BR is among the largest railway networks in the world but it is not among the modern railway system. Still now the accident proof magnetic wheels are not there in all trains.

Lack of Safety - The safety measures are not well followed in Bharatiya Rail. Many level crossings are un protected, the almost all local passenger trains' doors does not close when train in motion. Almost all local trains are overcrowded and caused accident.

Delayed schedule - The one of the main weakness of Bharatiya Rail is delayed trains. The local trains never runs in time, they are always late and canceled. May be it is the bad effect of monopoly but it is true that people use to wait several minutes every day as the trains are always runs delayed schedule.

Non pro-active employees - The job under government in India is permanent, and there have no pressure for work. Therefore the employees are not active to do their job properly and as a result the passengers are suffering everyday from unlearned toilet to no drinking water in station, long line in ticket counter to delayed and overcrowded train.


Metro Railway - In India recently two cities have metro railway or underground railway facilities, i.e. Kolkata and Delhi. The commercial city like Mumbai has no metro railway still now. The project is running and when the metro project will be finish then the Bharatiya Rail can encase the opportunity of a large crowd.

Small cities development - The Bharatiya Rail has opportunity, that it can develop the rail network across the small cities. Because the major portion of lower middle class people stays in small cities and they use to prefer train for their daily travel. Therefore the development in small cities is a greater opportunity for the Indian Railway.

Privatization - Through part privatization the rail can get the opportunities