Restructuring / Turnaround Strategies Case Study

Indian Railways: The Cost of Public Service

Abstract:

Celebrating its 150th anniversary in early 2003, Indian Railways (IR) is yet to see positive figures on its financial papers. Being India's biggest public sector undertaking with 1.5 million employees and a capital investment of $10 billion, IR finds itself mired in bureaucracy and ideological constraints that has strangled its growth. With an extremely high operating ratio, it is neither able to cover its depreciation nor support its maintenance and expansion activities.

Pedagogical Objectives:

• To discuss the options before Indian Railways -whether to continue as a public utility service or restructure itself into a commercial enterprise.

Keywords : Government and Business Environment Case Study, Indian Railways, Rakesh Mohan Committee, Railway budget, Rail India Technical and Economy Services Ltd (RITES), Indian Railway Construction Corporation (IRCON), Indian Railway Central Organisation for Telecom (IRCTC), Prakash Tandon Committee, Business Environment Case Study, Commercialisation of Indian Railways, IR (Indian Railways), Views on privatisation of Indian Railways, Railway finances, Partition of India, Pension liability of Indian Railways, Railway zones