Case Study Of A Public Sector Management Commerce Essay

Bharatiya Rail ( BR ) is the largest railroad web in Asia and the 2nd largest in the universe after USSR, but it is the largest one under a individual direction system. BR is good known as “ The line of life of the state ” because ; the BR serves 1000000s of people every twenty-four hours to make them to their finish throughout the state. BR is besides employed the big figure of direct employee, which is around 1.6 million and it refer the BR as the universes ‘ largest employer. Except of the direct employee the BR besides gives employment to about seven 1000000s people indirectly. In the early -2000s a study shown that in every 10 Indians, one is dependent on BR straight or indirectly for his life. The Indian Railway carries about 13 million people every twenty-four hours across the state.

BR operates as a ministry section under the cardinal Government of India, headed by a cabinet rank curate. The BR has a great importance in the Indian economic system ; the BR is the lone section that presents budget to the Parliament offprint from the one-year general budget. ( Icmrindia, 2005 )

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Some facts about The Bharatiya Rail – Here are some facts about the BR which will assist to cognize the organisation decently:

The Bharatiya Rail are more than 150 old ages older railroad web.

The approximative length of the entire path of the IR is 63,000 kilometres.

The entire figure of railroad station is more than 7000 in India.

The IR ‘s day-to-day operation about is 7,525 trains which covers 7,031 railroad Stationss.

Bharatiya Rail has a particular fund to give fiscal aid to the victims of several railroad accidents, which was set up in the twelvemonth 1974.

The BR employed about 1.6 million employees.

The Bharatiya Rail owned 7,817 engines, 2,28,170 waggons for goods conveyance and 46,119 managers for public conveyance.

Bharatiya Rail runs underground Rail since 1984 in Kolkata, late another belowground rail path has opened in Delhi. ( Docstoc, 2007 )

Background of the Bharatiya Rail – The first train ran in British India ( undivided ) on 16th April, 1953 from Bombay ( Now Mumbai ) to Thane, a distance of 21 stat mis. The rule intent of set up the railroad web was to do an easier control over the big state. Initially the Indian people were afraid of going by rail, but as the yearss passed the people get used to on it and the rail became a of import portion of them. The British Parliament so announced an drawn-out program to spread out the rail web throughout the state. Now, rail is a most of import agencies of journey in India. ( Center for Management Research India, 2004 ) .

Organization & A ; Management Structure:

Bharatiya Rail is the universes ‘ largest conveyance company with direct employees ‘ strength of about 1.6 million. The BR is controlled by the ministry of railroad, under the Cardinal Government, and headed by the Union Minister of Railways who is supported by the two Minister of province and the Railway board. The direction construction and its activity are bureaucratic in nature like all other authorities section. Bellow organisational construction of the Bharatiya Rail are drawn which will assist us to understand the existent hierarchy of the Bharatiya Rail.






























MEMBER Technology











CLW Chittaranjan

DLW Varanasi

RCF Kapurthala

ICF Villivakkam

WAP Yelahanka

CAO ( R ) *

DCW Patiala



NF Railway ( Construction )

Metro Railway Kolkata

Cardinal Organization for Railway Electrification Allahabad


RDSO Lucknow

Railway Staff College Vadodra

CAO ( R ) *

Cardinal Organization For Modernization Of Workshops













( Beginning: P V S Praveen Kumar, October 2002 )

Business Scheme:

As the BR is a organisation wholly owned by the Government of India, hence the every scheme of the BR is related to the populace and employee friendly, the rule scheme is the support people after that devising net income. We the concern scheme of the Bharatiya Rail divided into some parts, which are discussed follows. ( Slideshare, 2010 ) .

Concentrate on Volumes: The rule scheme of the BR is to increase the gross revenues volume alternatively of increasing gross revenues monetary value. The BR took some stairss to happen this scheme.

The BR now giving importance to increase the volume of echt ticket holder. In India the figure of rider without proper ticket is really high, and the BR is now concentrating on the regular checking and high sum of mulct and higher penalty for the without ticket riders. BR is now besides running particular checking operation to collar the illegal riders. In this manner BR is now seeking to minimise the figure of illegal rider and procure the gross.

Another enterprise of the BR is to look on the popular path and do agreement for more riders and for this scheme the BR introduce train with more manager, it means with the about same cost they can transport more riders, that will assist them to acquire earn more gross. After this where needed they started new trains harmonizing to the demand. ( Slideshare, 2010 )

Unit of measurement cost reduces: BR ‘s scheme besides includes cut downing the unit cost, which means the minimisation of cost of production and service. To implement this scheme the BR is utilizing different policy. As it is a authorities organisation and in India the authorities organisation ever has the employee good policy, therefore the BR can non believe besides about the wage cut of the employee to cut downing the cost. ( Slideshare, 2010 ) .

As it has been discussed in the old point that the BR now increasing the figure of managers in the train to avail maximal riders with lower costs, for illustration usually BR runs a rider train with 8 to 10 managers but now they increase it to 12 to 14 managers, it means if a 8 managers train modified to 14 managers train than that train can run with small higher costs and big sum of excess riders. This policy is really profitable instead than run a new train. ( Slideshare, 2010 ) .

Share benefits with the clients: The Bharatiya Rail driven with a public good scheme. The BR ever has the scheme to function the people at its best. The BR reduced the ticket monetary value for back-to-back three old ages from 2005 to 2008 as the net income of the BR increased. Other than the menu installation the BR offers different benefits to its consumers. Some of them are old age benefits, Hotels and vacation place installations in different tourer topographic point, amusement and amusement park in several metropoliss, athleticss bowl and centre in throughout the state etc. ( Slideshare, 2010 ) .

Strategic Issues:

Bharatiya Rail is running with a slogan to function the state and assist the people to go throughout the state. The BR is a most of import thing in India and the whole state depend on it for rider traveling and goods conveyance, that ‘s why it frequently called as ‘Lifeline of the state ‘ . As the organisation ‘s cardinal slogan is to believe about the state before think about the net income, so its scheme besides designs to function people foremost. The BR incurs loss in some sector due to its service foremost scheme as in the clip of fiscal crisis the cost of running the railroad service went higher but the govt. did non increase the ticket monetary value due o the public involvement as in fiscal crisis the populace besides faced job of money, even in some path the BR cutoff the ticket monetary value to assist the people. The study of the Comptroller and Auditor General of India ( CAGI ) shows that the Bharatiya Rail achieved merely 28 % of marks in last two old ages of 11th five old ages program ( 2007 – 2011 ) .

New Undertaking: In the 11th five old ages program ( 2007 – 2011 ) the BR planned to put in 2000 kilometres of new lines, convert 10000 kilometres lines to wide gage from metre and narrow gage lines, 6000 kilometres of dual path from individual path and electrification of 3500 kilometres route. But if we look on the study which is published by the CAG of India on April 2010, so we can happen the consequence which is like follows. The BR completed after two old ages, 513 kilometres new line installing ( which is 25.65 % of the projection ) , 2612 kilometres of gage transition ( 26.12 % of the projection ) , 789 kilometres of dual liner ( 13.15 % of the projection ) and 1299 kilometres of electrification ( 37.11 % of the projection ) . ( Beginning: Zee News, 2010 ) .

Public Net incomes: The CAG of India submitted the study in the Parliament of India, which besides showed that the one-year growing rate of Bharatiya Rail in rider net incomes goes down in last 12 months from 15.21 % achieved in the fiscal twelvemonth 2007 – 2008 to 10.52 % in the fiscal twelvemonth 2008 – 2009. The cause of this diminution is the duties to the populace as the BR is a public sector and in India the slogan of a public sector ever is to function the people foremost. During last twelvemonth India got affected O planetary fiscal crisis and people had less money for their disbursement, in this circumstance the govt. policy was to cut down ticket monetary value or non to boost it while the disbursement to run the service was acquiring higher. ( Zee News, 2010 ) .

Delayed Project & A ; cost increasing: The study of CAG of India reflects that the current running undertakings of the BR are 144 and six of them are delayed from over 10 old ages and with this hold the cost of the undertakings are besides increased. The excepted completion cost of these undertakings were Rs. 3,463.60 crores ( Indian Rupees ) while the present completion costs stands at Rs 2,33,289 crore ( Indian Rupees ) .

HRM of the org:

The Human Resource Management is really of import in any organisation and when an organisation is like Bharatiya Rail which has about 1.6 billion direct employee capacity so HRM plays a really large function to run this organisation. The HRM in BR can be discussed in some parts like,

Recruitment: The enlisting procedure of the Bharatiya Rail organizes through the Bharatiya Recruitment Board ( BRB ) . The enlisting procedure has some stairss, foremost the particular zone collects informations about how many staff required and in which appellation they are required, so they send all inside informations to BRB to enroll staffs for them. Every zone has BRB subdivision and they advertize the enlisting inside informations in national and local intelligence documents throughout the state to seeking employee. After shuting day of the month of application they opened application and calls all suited campaigners for written scrutiny in a specific centre. The following measure is to measure the scrutiny documents and calls top campaigners harmonizing to their demand for certification confirmation and so offers occupation for the station. This procedure usually takes 10 months to 12 months and it is wholly control by the cardinal BRB to protect illegal activities and corruptness.

Management the bing employees: The BR is a really big organisation and the policy of the employee direction is same in all zones. BR runs with influence of the cardinal authorities of India ‘s HR policy and it ever really soft in nature and employee friendly, the theoretical account of the HRM is followed by the BR Idaho Harvard Model. BR besides allows its employees to fall in trade brotherhoods of their pick to stand for them.

Wage construction: Pay construction of the BR is wholly influenced by the Government of India. The cardinal authorities has a unvarying policy of wage construction to pay its full employee. Every 10 old ages the authorities form a commission called ‘Pay Commission ‘ who analyze the current wage construction and its viability with the market and urge the govt. to reconstitute the payment policy.

Other benefits: The BR besides offers others benefits to its employees, like free railroad travel to its employee and their household throughout the state, free medical and infirmary installations, instruction support to its employees ‘ kids etc.

Industry Analysis:

The Bharatiya Rail is a section of the cardinal authorities and the premier conveyance organisation in India. In the rail conveyance sector the BR has the monopoly and the major per centum of Indian people prefer the railroad for their travel demands. Besides these positive sides the BR has some job besides and need to reconstitute the system. The ministry has a proposal towards the hereafter which can be inferred as the vision or end of the organisation. Bellow the proposal has mentioned, which was announced by the ministry of railroads.

Vision 2020 & A ; Strategic move: The Railway Ministry announced a big investing of 14 lakhs Crores Indian Rupees in ten old ages or 1.4 lakh crores Indian Rupees on one-year footing under the strategy of Vision 2020. Every clip negotiations about the organisation motion it is expected to develop the scheme, plan and organisational construction to accomplish the end. Vision 2020 has introduced three of import strategic setup or the railroad growing over the following decennary. First constituent is to divide the dual line corridor for the rider and cargo conveyance. Second is to increase the velocity of train from 130 to 160 – 200 kmph scope, and the 3rd is to present four high velocity slug train service with velocity of 250 – 350 kmph scope. ( Word Press, 2009 )

Organization Restructure: If the Ministry wants to implement the Vision 2020 decently so the organisation would be need to alter the organisational construction for effectual determination devising, efficiency and public presentation. Since independency, the BR has non introduced any notable new path and merely go oning to construct the British bequest. Now the needed things are to present new paths, create new substructure, new engineerings and happen out the new agencies and beginning of support and investing for the farther development. ( Word Press, 2010 ) .

Corporatization: The Railway is working is a section of the cardinal authorities of India. For the development and achieve the Vision 2020 the Railway should be converted to a public sector keeping company with board of manager headed by the CEO or Executive Chairman. The bid to the company should be for set uping and runing the railroad web expeditiously & A ; efficaciously and do extra gross for reinvestment in bing and new undertakings. The authorities support through budget with operational subsidies on definite sectors and activities must be accepted for first ten old ages till new theoretical account bases.

Providentially for the Bharatiya Rail, it is non any job to happen markets with the uninterrupted turning population. BR merely needs to be aggressive with other alternate options of transit through proficient up step and rider good focal point.

Therefore, the Bharatiya Rail restructuring should be aimed at focal point on development of substructure, proficient development and operational efficiency. The first two facets should be handled through Strategic Business Units, as they have strategic importance. Operational efficiency is the failing of the Bharatiya Railways and therefore operations reconstituting should take to better. ( Word Press, 2010 )

Strategic Business Unit of measurements: The most notable attack to run the Bharatiya Rail in future should prosecute in division of ownership & A ; direction of substructure & A ; engineering development and operations. The restructure procedure should be done to pull off three strategic setup of Vision 2020 discretely with three Strategic Business Units ( SBUs ) . This is that for puting up two SBUs to put up new and manage bing substructure to dedicated corridors for riders and cargo individually. The strategic vision to increase velocity degrees needs to be moved by the separate SBU for redevelopment and technological up step of bing substructure of the railroad webs. Reasonably, the same SBU can put up substructure for high velocity slug trains. This restructuring of substructure & A ; engineering would give a alone strategic individuality and position for achievement of the Vision 2020. ( Word Press, 2009 )

Public Private Partnership: Public Private Partnership ( PPP ) has been accepted by ministry of railroads and railroads board for a certain limited and selective facets. To take form an option, we have to look at route conveyance web which are one of the of import and efficient manner of conveyance today. The roads and highways web substructure is owned and set up by the authorities. But the go oning stock on the roads is owned by the 1000s of companies both private and public sectors and besides 1000000s of persons. This little difference is a important driver of efficiency & A ; productiveness. Can the authorities non follow & amp ; accommodate the similar theoretical account, suited to go oning stock for Bharatiya Rail?

The strategy ‘Own Your Wagon ‘ has been in operation in a really limited mode. It would preferable that a separate subordinate company, like “ Indian Railways Rolling Stock Company ” ( IRRS ) , under the keeping company, which would have the turn overing stock, transport the lading & A ; riders and the user of the substructure of the Bharatiya Rail ‘s web. IRRS can hold the 99 or more twelvemonth rental for utilizing the web with exchange of rental leases which is to be paid to the several SBUs for supplying railroad substructure and engineering along with needed care services. Therefore IRRS should hold focal point on lone operations. SBUs of substructure & A ; engineering would be responsible for their single activities at their ain costs, that can be recovered through leases and one-year care contracts fees from IRRS.

The IRRS must be that entity for partnership of private and public sector with the Bharatiya Railways. The fund elevation can be happen by selling portion and long term bonds to the populace, so that the turn overing stock will be indirectly owned by the 1000000s of stockholders and 1000s of corporate houses. For strategic grounds IRRS will hold merely commanding involvements through equity portion from the keeping company. The consequence of this attack would let the political concern to give concentration on budgeting merely for investings in substructure & A ; engineering on one manus and on the other manus operational subsidy. It has no demand to state that the operation must be bring forthing sufficient gross to do up for the costs and do extra money. It is easy apprehensible that the sensitive determinations like rider menus and cargo charges must be decided in greater public involvement and hence a factor of some selective subsidy can non be avoided. ( Word Press, 2009 ) .

SWOT Analysis:

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


In regard of the employee strength Bharatiya Rail is the universe ‘Biggest Organization ‘ – The human resource strength helps the organisation to get down any new undertaking without any job of work force. The big human resource besides helps the organisation to widen any portion of the organisation and if any enlisting job arises so maintain running operation with the aid of bing employees.

Palace on wheels – This is a luxury train which offers a really epicurean journey to see different topographic points in India. This is a really large beginning of income of the Bharatiya Rail, as the major per centum of the client of Topographic point on wheels are from outside of India so through this service the company earns a really large sum of money.

Connects different metropoliss – The Bharatiya Rail connects different metropoliss in the state. As the major part of the Indian people are from in-between category or lower standard fiscal conditions, so to see other topographic points rail is the lone suited agencies of conveyance which is cost effectual excessively.

Epicurean and low-cost – The Bharatiya Rail offers epicurean journey in relatively lower monetary value than other agencies of conveyance. The one of the epicurean train ‘Rajdhani Express’has different category for different types of people and their menu construction besides made consider with the common people.

Technological promotion – Throughout the full rail path the optical fibre installation already started by the Bharatiya Rail, it means in any topographic point one can travel through rail he/she will be connected with the others through cyberspace. Peoples can make their work during going. Alternatively of this the phone installation besides available in train service. Other than in train service, the engagement of the railroad ticket can be possible through cyberspace and even through nomadic text service. Therefore technological promotion conveying people more nearer to the Bharatiya Rail. ( Slideshare, 2010 ) .


Corruption – Corruptness within the section is the really large failing of the Bharatiya Rail. As all in Indian authorities sector corruptness is the large job, hence the Bharatiya Rail is non any exclusion. To the high Political degree and top degree direction to lower degree clerk, everyplace corruptness has hit and it affect the organisation and its profitableness severely.

Accident cogent evidence system – Though the BR is among the largest railroad webs in the universe but it is non among the modern railroad system. Still now the accident cogent evidence magnetic wheels are non at that place in all trains.

Lack of Safety – The safety steps are non good followed in Bharatiya Rail. Many degree crossings are un protected, the about all local rider trains ‘ doors does non shut when train in gesture. Almost all local trains are overcrowded and caused accident.

Delayed agenda – The one of the chief failing of Bharatiya Rail is delayed trains. The local trains ne’er runs in clip, they are ever tardily and canceled. May be it is the bad consequence of monopoly but it is true that people use to wait several proceedingss every twenty-four hours as the trains are ever tallies delayed agenda.

Not pro-active employees – The occupation under authorities in India is lasting, and at that place have no force per unit area for work. Therefore the employees are non active to make their occupation decently and as a consequence the riders are enduring everyday from unconditioned lavatory to no imbibing H2O in station, long line in ticket counter to detain and overcrowded train. ( Slideshare, 2010 ) .


Metro Railway – In India late two metropoliss have metro railroad or belowground railroad installations, i.e. Kolkata and Delhi. The commercial metropolis like Mumbai has no tube railroad still now. The undertaking is running and when the tube undertaking will be finish so the Bharatiya Rail can incase the chance of a big crowd.

Small metropoliss development – The Bharatiya Rail has chance, that it can develop the rail web across the little metropoliss. Because the major part of lower in-between category people stays in little metropoliss and they use to prefer train for their day-to-day travel. Therefore the development in little metropoliss is a greater chance for the Indian Railway.

Denationalization – Through portion denationalization the rail can acquire the chances, late the organisation has started to welcome private investing in that sector like, BR already allowed McDonald ‘s, NESCAFE , Wal-Mart to make their concern in its premises and in providing service rail encourages little private investings to work with. The BR besides now inquiring private investing for terminal Stationss alteration and care. Therefore through the denationalization, whether may be it portion or full, the BR has the chance to maximise its gross. ( Slideshare, 2010 ) .


Low cost air hoses – In recent yearss low cost air hoses are increasing in the state and the menu of those no frill air hoses charges about about the same charges compared with first category AC rail menu. But now people start sing the low cost air hoses for travel as it has a great advantage of less travel clip. Therefore these low frill air hoses are going a large menace of BR.

Improvement of Road conveyance: From last five old ages the route conveyance is continuously bettering with the route status and the conveyance installations. The route travel is now become easier and comfy, so people besides consider this agency of conveyance system for their journey. Road conveyance, both rider and goods, is cutting market portion of the BR. ( Slideshare, 2010 ) .


In the instance survey of the Bharatiya Rail we have found different facts of that specific public sector organisation. The Bharatiya Rail owned and tallies by the Government of India with the service slogan. The scheme of this concern organisation besides depends on this slogan. The BR has the monopoly in the particular sector in India and the about 1.1 billion people depends on it but still they incur loss because they can non do big net income by boosting the menus as the 80 % of the people of India are in bellow poorness degree or in-between category who needs inexpensive travel agencies. The BR besides faced some fiscal job and as a consequence of this their betterment undertaking besides achieved partly after two old ages which is merely 28 % . Naturally the net incomes besides went down. Other than these the BR has different chances and menaces and Strength and failing besides. The Bharatiya Rail operates the full railroad webs as a individual organisation therefore they have a broad scope of chances with some menaces like turning no frill airlines popularity, route conveyance installations betterment etc. The Govt. now taking the BR as a concern establishment and in some respect the determination devising is procedure is go oning through corporate manner instead than political. Therefore we can reason with that the BR is a really big organisation with huge scope of activities and it is running swimmingly though in some country it incurs loss but the chances of the sector is really high and now on the organisation is traveling that manner.


On the footing of the instance study some of the recommendations are can be as follows:

The BR should electrify it ‘s all webs with a great importance, because through electrification the running cost can be reduced in great extent. For illustration, cost of coal and Diesel ( these two stuffs are used except the electricity to run train ) is higher than the electricity and it consumes more than electricity.

For cost decrease the railroad can besides set up power workss in different country, it will assist the railroad to devour the electricity in lower costs than the purchase and the extra production can besides be sold to the domestic power supply company, as India has power job.

The BR needs to entre in-city conveyance installations with great involvement. The in-city conveyance like ‘Underground rail ‘ ( in India it is knows as Metro Rail ) . Soon two metropoliss Kolkata and Delhi have the resistance train installations, but they are besides non extended. Underground or Metro rail can pull tonss of office riders and others to go which will assist to gain more gross, for illustration the London Tube has a really big and drawn-out country coverage and in India both Kolkata Metro and Delhi Metro are really successful tally with immense riders.