Captured corporation

EducationWorld January 2022 | Magazine Postscript

Latest proof that the country’s parasitical public sector enterprises (PSEs) are dragging the economy down is provided by a recent report of the comptroller and attorney general of India (CAG ) on Indian Railways which boasts the world’s largest number of employees (1.6 million). According to the CAG report published last month, to conceal its miserable operational performance, IR has been indulging in blatant “windowdressing”.

In the pre-pandemic year 2019-20, against the target of 95 percent this monopoly corporation’s operating ratio (expenditure as a percentage of revenue) was actually 98.44 percent, and over four years ending 2017-18 its revenue surplus decreased by more than 66 percent — from Rs.4,913 crore in 2016-17 to Rs.1,665.61 crore, which means that this monopoly has no surplus left for capital expenditure in track, rolling stock and infrastructure.

The plain truth disguised under high-sounding rhetoric about IR running 11,000 trains per day which are the lifeline of the Indian economy, is that like most PSEs which are bleeding the economy dry, this megacorp has been captured by its 1.6 million employees. The CAG report notes that against the revenue target of Rs.216,935 crore incorporated in the Union Budget 2019-20, the corporation earned a mere Rs.174,694 crore.

However, IR spares no expense on the welfare of its current and former employees. Its pension bill is an astonishing Rs.51,000 crore per year and former and current employees enjoy almost limitless heavily subsidised travel on the nationalised railway. Rail tickets are never available on demand because on any given day 33 percent of IR passengers are current or former employees.

Moreover, a proposal to allow private companies to rent IR tracks to run private trains — which would augment the corporation’s annual revenue substantially — has repeatedly been sabotaged by IR’s comfy employees. That would be against the principles of socialism.

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