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INDIAN RAILWAYS: LARGEST EMPLOYER

4.1 ECONOMICS-ii

Submitted by

Brijbhan Singh

UID No. SM0116014

Second year Fourth semester

Submitted to

Ms .Tanushree Baruah

National Law University & Judicial Academy, Assam


Contents
Abstract ........................................................................................................................................... ii

Introduction ..................................................................................................................................... 1

Aim ................................................................................................................................................. 2

Objectives ....................................................................................................................................... 2

Scope and Limitations..................................................................................................................... 2

Literature Review………………………………………………………………………………2-3

Research Questions ......................................................................................................................... 3

Research Methodology ................................................................................................................... 4

Organization structure of Indian Railways…………………………………………………..5-6

Labour welfare in Indian Railways………………………………………………………...7-9

Vision 2020 and employment generation in Indian Railways……………………………10-11

Conclusion .................................................................................................................................... 12

BIBLIOGRAPHY .......................................................................................................................... iii

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Abstract

.Indian Railways is one of the largest systems in the world under single management. It is
also one of the very few railway systems in the world generating operating surpluses. With a modest
beginning in India from 1853, the Indian Railways has emerged today as the main vehicle for
socio-economic development of the country. Indian railways is contributing significantly to the
employment generation. One of the main objectives of railway vision 2020 is also to generate
large scale productive employment. Indian railway is a labour intensive industry having a
workforce of over 13.6 lakhs employees. Indian railway is one of the largest employer not
only in India but also in the world. The workforce of Indian railway is a varied mass of people
from the gang man at one end to chairman of railway board at apex level. The present study
makes an attempt to highlight the contribution of Indian railways towards employment generation.
The study also concentrates on Railways share in India’s G.D.P. This study highlights the
importance of Indian railways among all other employers.

Keywords: Employment, service sector, Indian Railways

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Introduction
Indian railways is regarded as the largest employer in the public sector in India.
Railways being the giant of organized sector, it has generated a large scale of formal
employment as well as informal employment. Indian railways is one of the major infrastructures
under service sector. It is one of the largest railway systems in the world under a single
management. Indian railways is a labour intensive industry having a workforce of over 13.6
lakhs employees. Indian railway is one of the largest employment provider not only in India but
also in the world. Employment generation has been one of the important objectives of
development planning in India. Indian railway is contributing significantly to the employment
generation. One of the main objectives of railway vision 2020 is also to generate large scale
productive employment.
The workforce of Indian railway is a varied mass of people from the gang man at one end to
chairman of railway board at apex level. Railway employees are working in various categories in
the zonal railway and production units. There are around 700 categories of staff divided into 4
groups as A B C and D assigned according to working responsibilities. Apart from these formal
employment Indian railways is also generating a large scale of informal employment through
forward and backward linkages.
Indian Railways is one of the biggest public sectors in the country and its employee more than 13
lakhs of people under different categories. It has separate department to deal with the
employees’ problems and tries to manage them effectively. From the very beginning of
the industrial venture labour has been an important factor of production .

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Aim
The aim of this project is to understand the employment sustainability and labour welfare
in Indian Railways.

Objectives
The objective of the project is to find out

1) Labor welfare related schemes in Indian Railways.


2) Vision 2020 of Indian Railways with respect to employment generation.

Scope and Limitations


The scope and ambit of the project was too wide that it was practically impossible for the
researcher to comprehend all the aspects of the knowledge into this paper due to the lack of time
and resources. Hence, the researcher has limited the study to an attempt understand the
organizational structure of Indian Railways and the researcher also analysed the labor welfare
schemes and vision 2020 of Indian Railways.

Literature Review

G. Alivelu (2010) has studied salient aspects of growth story of Indian railways. His study
analyses the trends of output and employment of Indian railways for the period of 1981-82
through 2007-08. Labour is divided into 3 categories they are; skilled management
personnel (group A and B), semi-skilled employees (group C), and unskilled
employees(group D). This study reveals that the percentage share of the semi-skilled
labour has increased, the percentage share of the unskilled labour registered a decline and
it shows that skilled management personnel contributed more to output than semi-skilled labour.

Rakkeethimothy (2010) has made an attempt to understand the changing structure of


service sector employment in India over past three decades. She is of the opinion that
the increasing share of service sector in GDP and stagnant employment generated from
the sector has become a serious threat as unemployment is still a major problem in

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India. She says that the reason for this asymmetrical relationship in income and
employment generation is due to the pattern of service sector growth experienced in the
country. Through her detailed study she has reached at the conclusion that at the macro
level much changes has occurred but at the sub sector level employment there are so
many changes. The employment generation in the service sector remains low.

Falguni Pattanaik and Narayana Chandra Nayak (2011) investigated the employment
intensity of service sector growth in India. The results of their study indicates that over the years
there is an increase in output growth rate in service sector but employment growth rate
has declined significantly it leads to fall in employment elasticity. According to authors to
achieve higher employment elasticity in service sector there is a need for investment
friendly environment, effective labour policies and proper structural transformation.

T.S. Papola and Partha Pratim Sahu (2012) made an attempt to study the growth and
structure of employment in India with special focus on the post liberalization period. This
study assesses the employment challenges and examines the prospects of generating
productive employment of adequate quality and quantity. Authors suggested some
strategies to achieve faster growth of productive employment as there is a challenge of
creating new jobs as well as improving quality of existing jobs.

Research gap: There are number of research papers related to service sector employment
but there is no particular study related to employment generated by Indian railways which is an
important component of service sector in India. And no study has focused on the group wise
employment over years. This study is an attempt to show that Indian railway is one of the largest
employment providers of service sector in India.

Research Questions
1) What is the organizational structure of Indian Railways?
2) What are the different welfare related schemes in Indian Railways for labors?
3) What are the different measures suggested by vision-2020 for employment generation?

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Research Methodology

Researcher conducted Doctrinal type of research to collect proper data and gather appropriate
information. The use of library sources and internet sources has greatly supplemented the research.
Various books pertaining to the subject have been immensely helpful in guiding the research.
The researcher followed Bluebook 19th edition format for footnotes citation and APA format for
bibliography.

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Organizational structure of Indian Railways-

Indian Railways is an Indian state-owned railway company headquartered in New Delhi, India.
It is owned and operated by the Government of India through the Ministry of
Railways. Indian Railways has 114,500 kilometers (71,147 mi) of total track over a route
of65,000 kilometers (40,389 mi)and 7,500 stations1. It has the world's fourth largest
railway network after those of the United States, Russia and China. The railway ministry is
headed by the union minister for railways and assisted by two ministers of the state for
railways. Indian railways is administered by the railway board, which has a financial
commissioner of five members and a chairman. Railway employees are classified into gazetted
(Group 'A' and 'B') and non-gazetted (Group’C’ and ‘D’) employees2. Group A&B consists of
accounts officers, traffic service officers, engineers (civil, mechanical, electrical), stores
officers, signal and telecom officers, personnel officers, financial advisors, medical
officers. Station masters, inspectors of work, supervisors, technicians, pharmacists, guards, train
ticket examiners, engine drivers, clerical staff all come under Group C. Group D consists of
gang men, attendants, train sweepers, office peons, train attendants, hospital attendants etc.The
recruitment of Group 'A' gazetted employees is carried out by the Union Public Service
Commission through exams conducted by it. The recruitment to Group 'C' and 'D'
employees on the Indian Railways is done through Railway Recruitment Boards and Railway
Recruitment Cells which are controlled by the Railway Recruitment Control Board(RRCB).

1
Indian Railways, Report on Track & Bridges,
http://indianrailways.gov.in/railwayboard/uploads/directorate/stat_econ/IRSP_2013-14/pdf/Year_Book_Eng/10.pdf
2
Commonwealth secretariat, Public Service of India 14 (1 st Ed. 2004).

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Challenges in organizational structure of Indian Railways-

Major constraints under the present organizational structure preventing the growth of
railways are:
a)The Railway Board is the chief administrative and executive body. Apart from its
functions as the top Railway executive body for the administration, technical supervision and
direction of the Railways, the Railway Board function also as a Ministry of the
Government of India and exercises all the powers of Central Government in
relation to the Railways. The Railway Board also exercises the powers of the
Government of India in regard to Railway expenditure subject to the ultimate financial
authority of the Minister of Railways and the Union Cabinet. This organizational
structure was set up during the British era in the 18th century. Due to the current roles
and responsibilities, Railway Board is left with little time for strategic thinking and for
policy making function. It is unable to focus on primary vision of the Railways.
b)Inadequate empowerment at zonal railway level coupled with absence or diffusion of
accountability has caused poor project management and inadequacies in project
delivery system resulting in enormous time and cost overrun.
c) Absence of a policy review system. There is no system to review, evaluate and improve the
functioning and efficiency of Railway Board at present.

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Labour welfare in Indian Railways

Employees’ welfare has acquired an important place in the modern commercial world. The main
aim of the employees’ welfare is to establish and maintain relationship at all levels of
management by giving satisfactory conditions of employment, and also provide fairly for their
requirement. The modern industrial welfare covers the entire gamut of activities undertaken to
secure to the industrial worker an essentially human status, to make him a better citizen and to
improve his efficiency and economic position. The Railways have done a lot in respect of
providing welfare facilities for their staff3. As Indian Railways is stressing towards improvement
in quality and productivity, the Personnel Department of Indian Railways aims to play a critical
role in building Railway as an efficient, responsive organization by recruiting ideal people,
training them to face the challenges of the future, and serving the employees with dedication and
commitment. In consonance with the ideals of a welfare state, the Railways have been pursuing a
policy of progressively improving the working and living condition of their workers. Indian
Railway’s welfare schemes cover a wide spectrum of activities in areas of education, Medicare,
housing, sports, recreation and catering.
1. Housing amenities- Housing is one of the serious issues responsible for dissatisfaction and
poor industrial relation of all the requirements of the workers; cheap housing accommodation is
of great significance. The Railway employees have to live either at wayside station with poor
amenities or at big station where the pressure of population creates shortage of housing
accommodation except at abnormal rents, with the result employees often do not get suitable
accommodation unless provided by the administration. It is true to say that some employees do
not get house quarters throughout their services due to lack of accommodation and
mismanagement of affairs in Railways. After independence, the problems has not been solved as
is evident from the reports of Indian Railway that only 40 percentage employees are enjoying
accommodation facilities.
2. Medical and health services- Today various medical services like Hospital, Clinic, and
Dispensary facilities are provided by organization not only to employees but also their family
members. The Indian Railways have been pursuing a policy of progressively improving both
working and living conditions of staff and providing them with maximum possible amenities in
several spheres including medical facilities. The question of adequacy of medical and sanitary

3
Dr. Asiya Chaudhay & Roohi Iqbal, An empirical study on effect of welfare measures on employees’ satisfaction
in Indian Railways, Vol.2 Issue. 7 Ijrcm 130-132, 130-136 (2011).

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arrangements in Railways has drawn attention of the Railways Board since 1924. The Railway
Accident Committee 1992 rightly observed “the Medical facilities both in scale and quality on
the Railways are second to no other organization in India”, The Railway medical services,
catered only to routine administrative necessities, viz., medical examination of staff, issue of fit
and unfit certificates, check on malingering, etc., while attention to the curative and promotional
health care of the railway staff was meager or absent.
3. Welfare benefits- Staff Benefit Fund: Another significant welfare scheme developed in
Indian Railways has been the Staff Benefit Fund. The Staff Benefit Fund was established on
Indian Railways in the year 1931. Ministry of Railways have decided to modify the distribution
of modify per capita annual contribution of Rs.35/- to 315/- under Staff Benefit Fund sanctioned
vide Board’s letter under reference4. Staff Benefit Fund is an important channel for providing
additional facilities to railway employees and their families in the spheres of education,
recreation, Medicare, sports, scouting and cultural activities.
4. Canteen facilities- Perhaps no employees’ benefit has received as much attention in recent
years as that of canteen. Canteen is a small cafeteria or snack bar, especially one in a military
establishment or place of work.
5. Educational facilities- Educational facilities one of the significant welfare scheme developed
by Indian Railways are as follows: Railways Schools: Railways administration provides the
facilities of primary, middle, and high schools and colleges in those Railways colonies where
such facilities of requisite standards are not available in or near them and the State Government
or educational organization are not willing to provide them. However, Railways have provided
educational facilities to the limited extent within the constraint of available resources purely a s a
measure of staff welfare to meet the needs of wards and children of Railway employees only at
such places where there is a concentration of Railway employees and the educational facilities
provided there at by other agencies - both Government (Sate/Central) and private are found
inadequate or are totally absent resulting in hardship or inconvenience to them. The Railways
Board has also decided, as a matter of policy to establish Kendriya Vidyalayas preferably in
"Civil Sector" in Railway colonies which will, while meeting the needs of the employees, reduce
the financial burden on the administration of the schools.
6. Recreational activities- Indian Railways attaches due importance to recreation for its
employees and provides excellent facilities through Institutes & Clubs for sports, libraries, etc.

4
Indian Railways, Indian Railway establishment code, Staff benefit fund,
http://www.indianrailways.gov.in/railwayboard/uploads/directorate/establishment/estbl-vol1-chap8-p01-p08.jsp.

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and Holiday Homes to enable the employees and their families to enjoy holidays at nominal
expenses. Holiday Homes: Holiday Homes have been established as a measure of amenity of
staff. The broad principles, within the framework of which Railway Administrations may
establish Holiday Homes, are indicated below: (a) Holiday Homes may be set up in suitable hill
stations or seaside resorts or other pleasant surroundings or where popular demand exists.
7. Retirement benefits in Indian railways- The retirement benefits provided to Railways
employees are as follows in the form of provident fund, pension. a) Provident Fund: Every
Railways employee on completion of one year’s services is entitled to join, the provident fund,
initially the Railway administrations’ contribution and interest thereon was extended only to
permanent employees, The Provident Act, 1925, governs provident Fund and it means that a
fund in which the subscriptions of the employees are deposited against their accounts including
interest accruing thereon.xix b) Pension: Railways employees represented that the pension
scheme provides more security then the provident fund. This scheme provides to All Railway
servants who were in service on 15.11.1957 who elect to come on these rules; persons entering
Railway service on or after 16.11.1957 except those whose terms of appointment provide to the
contrary and all CPF beneficiaries in Service in 1.1.1986 should be deemed to have come to
pension scheme unless they specifically opt out to continue under the CPF Scheme.

Challenges regarding Labour welfare-

a) The Employees’ welfare schemes are not sufficient for the employees of the Indian
Railways and other things that no improvements are found in any schemes.
b) The medical facilities are way backward in hospitals of Indian railway and there is a need
to further improve these facilities by way of having modern equipments in the hospital
and clinics and by providing quality medicine in these hospitals and clinic of Indian
Railways.
c) The Indian Railways should also pay attention on most importantly Staff Benefits Fund
because this fund is to be mainly utilized for education of staff and their children, grant
for scholarships for technical and higher education, recreational and amusement of the
staff and their children, grant to Railway institutions& club, sports and other
tournaments, relief distress among the Railways employees, grant to maintenance of
Railways employees.
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Vision 2020 and employment generation in Indian Railways

Vision 20205 addresses one of the biggest development challenges of contemporary India,
namely, Growth with Jobs and not Jobless Growth. Productive employment opportunities must
be created for all able-bodied Indians, especially for our youth and preferably in their own
habitats. By pursuing bold and unprecedented, ambitious targets in the much-needed expansion
and modernization of the railway network in India, Vision 2020 aims at considerably enhancing
the Indian Railways' contribution to the national goal of achieving double-digit GDP growth rate
on a sustainable basis. It will accelerate economic growth, open up new avenues for employment
in the primary, secondary and tertiary sectors and also promote geographically and socially
balanced growth.
Railways have established an unblemished reputation of being a model employer. It has attracted
and retained some of the best civil service and engineering talent in the country to man its
managerial cadres. However, in the face of stiff competition for talent in the country, especially
from the highly competitive private sector, Railways can not remain complacent on this score.
Government ownership confers certain advantages and entails certain disadvantages in this
respect. A government job is still regarded attractive but government can not compete with
private sector on compensation. The only way to attract and retain talent is to provide a very
challenging and stimulating environment where talented employees can realize their full
potential, contribute to the growth of railways and take pride in the public service ethos of the
organization. Only vibrant and growing railways can provide that attraction. As a part of the
Human Capital Mission, the requirement of jobs at various levels will be assessed and mapped.
Recruitment of the right kind of talent, training, grooming and career planning of employees
linked to performance and the challenges facing the organization will form part of the Mission.
An optimal mix of external and in-house training as well as collaboration with topmost
management and technical Institutions will be used to achieve the mission's objectives.
Infrastructure at IR's training facilities will be strengthened and augmented to meet the challenge
of capacity-building for anticipating and managing change, building, operating and continuous
upgrading a market- focused and technologically sophisticated railway system.

5
Indian Railways, Vision-2020,
http://www.prsindia.org/uploads/media/Railways%20Vision%20Document%202020.pdf

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Challenges for Vision-2020-

a) The trade unions, if railway wants to work with quality human resource then it has to be
include and provide appraisals to the trade unions and work according to it, it is a major
challenge for Indian railways.
b) The training and recruitment facilities are not up to mark to provide quality human
resources.
c) The organizational structure of Indian railways is not according to the private
organization and the incentives are also not good so if the railway wants to employ the
best then it has to provide environment in lieu with the private organizations and it is a
major challenge for Indian railways.

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Conclusion
This study analyzed the contribution of Indian railways towards employment generation. Indian
railways is not only generating formal employment but also a large scale of informal
employment through its forward and backward linkages. Study reveals that service sector is
gradually improving its share in employment. Within service sector though transport, storage and
communication sector is potential of large scale employment generation, it has not performed so
well. The study reveals that Indian railways is capable of generating large scale of employment
with its expansion The researcher reached with this conclusion after thorough study of all the
aspects of Employees’ welfare which have been covered in this paper that inadequacy of
financial resources is one important reasons pointed out by the railway administration in
opposing the demand of extension of employees’ benefits and services. But it is true say that the
Indian Railway has been doing more and more favor to the public in comparison to the other
industries. It is pointed out that the Railways have been discouraging the social burden at the cost
of their own employees. Hence, it maybe suggested that, the railway may minimize the cost of
social burden and ask the Government to subsidies the social cost.

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BIBLIOGRAPHY

Books & Articles

 Uma, H.R & Shruthi B.R. (2014, March). An analysis of Indian Railways contribution
towards employment generation. International Journal of Advanced Research in
Management and Social Sciences, vol. 3, 85-96.
 Srivastava, Ravi. (2012). Changing employment conditions of the Indian workforce and
implications of decent work. Global labour journal, vol.3: Iss.1, 63-90.
 Thimothy Rakkee. (2010). service sector employment in India: A case of accommodating
surplus labour? Labour and development, vol 17.
 Alivelu G (2010). salient aspects of the growth story of Indian railways 1981-82
through 2007-08”. center for economic and social studies, working paper no.86

Websites
 Dget.nic.in
 Indiabudget.nic.in
 Planningcommission.gov.in
 Niti.gov.in
 Indianrailways.gov.in
 Prsindia.org

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