1. Indian Railways empowers executives, undercuts finance department

Indian Railways empowers executives, undercuts finance department

In a bid to ensure that railway projects that bring value to customers are not impeded by technical objections raised by the national transporter’s finance wing, the ministry of railways has increased the powers of the executive stream to implement projects.

By: | New Delhi | Published: April 15, 2017 6:02 AM
The move is in line with the recommendation made by the one-man committee headed by E Sreedharan. (PTI)

In a bid to ensure that railway projects that bring value to customers are not impeded by technical objections raised by the national transporter’s finance wing, the ministry of railways has increased the powers of the executive stream to implement projects. According to an order issued by the ministry, the chairman of the Railway Board (CRB) can take the final decision on projects in case a difference of opinion arises between the financial commissioner (FC) and other board members.

“In the event of a difference of opinion between the Financial Commissioner and other members of the Railway Board, the Members may bring such cases to the notice of the CRB bringing out financial observations and detailed remarks thereon. The CRB will have full powers to take the final decision by recording a reasoned order,” noted the order reviewed by FE.

The move is in line with the recommendation made by the one-man committee headed by E Sreedharan. The committee was constituted in November 2014 by railway minister Suresh Prabhu with a view to finding ways to delegate tendering and commercial powers to the executives of the railways. The committee’s report was submitted in March 2015.

The new rule will be applicable at the zonal level too wherein the general manager (GM) will have the final say in case of differences among financial advisers and other executives. “Let the executives be responsible for their decisions. Earlier, the code said that the finance department cannot be overruled. They had the function of the watchdog. Even within a zone, if there was a disagreement between the financial adviser and the GM, the latter had to send the proposal to the FC, who used to take a call. But we have now decided that the GM is the final authority to take the call,” said a railway official, requesting not to be named, adding it will help in fixing accountability.

However, according to R Sivadasan, former financial commissioner of Indian Railways (IR), though it has been codified now in practice, FCs always used to consult the CRB in case of differences of opinion. “The observation made by the Sreedharan committee is absolutely correct and apart from stray incidences, earlier too, FCs and chairmen used to be in agreement before taking a decision. It has just been put on paper now.”

The order adds the financial commissioner may, however, bring instances of the CRB taking decisions against the former’s views to the notice of the minister of railways. But any reference to the ministry of finance, if required, shall be sent only after approval of the minister of railways.

The financial commissioner is the topmost authority within the railways to manage finances and the post is that of an ex-officio secretary to the Government of India. The commissioner has a direct line to the finance secretary and the post represented the finance ministry at the railways. Since before Independence, a representative from the finance ministry used to man railway finances but it was never changed till date.

“It (the order) has been done with a lot effort. It will reduce the power of the finance wing a little bit but even then an executive will need conviction to overrule the finance. It will make executives more accountable,” said the official quoted above. Others at the national transporter, too, believe the role of the finance department used to limit the working of the executive, as any finance executive can go to the superiors and ultimately to the finance ministry through the finance commissioner, making it a long-delayed process.

“At the back of the mind, the finance department is not looking at delivering projects, they are just focusing on managing money,” said another railway official who also did not want to be named. The second official quoted above added a lot of executives make the finance department a shield to not make any progress in projects. “It will make executives more responsible as they will not have the shield of the finance, and finance will also only object to or delay genuine problematic cases,” observed the official.

  1. B
    Balachandran.v
    Apr 16, 2017 at 9:23 am
    Good decision by railway. Better late than never.
    Reply
  2. S
    Seshagiri Rao Devaguptapu
    Apr 15, 2017 at 9:56 pm
    This is long over due. The finance had too much powers even a god technical projects are dela due to this Finance department interference. The so called guardians of purse strings.
    Reply
  3. N
    N C
    Apr 15, 2017 at 6:22 pm
    This move was long overdue
    Reply
  4. C
    Chakradhara Rao P
    Apr 15, 2017 at 12:11 pm
    Finance departments should help marketing and operational departments to perform and not boss over them and constrain them. This is one reason for the sickness of BSNL.
    Reply
  5. A
    Adarsh
    Apr 15, 2017 at 11:17 am
    Very nice
    Reply
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