Will the Goyal magic work on the Indian Railways?
On September 3, following the cabinet reshuffle, Piyush Goyal was appointed the new railway minister. Goyal faces a tough task at hand. The basic structure of the Indian Railways needs reform and PM Narendra Modi has promised high-speed trains and amenities. Besides improving safety and increasing revenue, Goyal has around 20 months to fulfill Modi's vision. Is he up for it? Let's find out.
A chartered accountant who has also studied law, Goyal came to prominence by managing the BJP's social media outreach and communications division during 2014 general elections. This division contributed widely to the BJP's win. He was rewarded with the portfolio of MoS for power, coal, new and renewable energy and mines. Under him, rural electrification and the e-auction of coal blacks received a boost.
As per an IndiaSpend analysis, the death-toll from train derailments in 2016-17 was highest in a decade. The operating ratio, i.e. the ratio of functional expenses to revenue earned, stood at 96.5% in 2016-17, the highest in five years. Thus, improving safety and overall revenue through freight and passenger transportation are major challenges that Goyal faces.
The Railways' bureaucracy works in separate divisions and not as a whole. To address this, Goyal's predecessor Suresh Prabhu tried restructuring the railways board to fasten the way decisions are taken and implemented. Prabhu tried other reforms related to cost-cutting, increasing non-fare revenue (through advertising, catering, etc) and increasing train speeds. These should give Goyal a good head-start.
Goyal, known to be a taskmaster, uses his understanding of finance and banking to come up with innovations and is known to set lofty targets. His work in running the BJP's social media division and as MoS in the power ministry are indicators of his competence. Goyal's performance will be crucial as it will impact the BJP's prospects in the 2019 general election.