GATI SHAKTI
VISHWAVIDYALAYA
PRINCIPLES OF RAILWAY OPERATIONS
GROUP-15
UTKARSH SINGH-2280054
VINEET KUMAR-2270018
VIVEK KUMAR SINGH-2260019
VIVEK YADAV-2280055
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Q. 15. Questions have been raised regularly about the
‘overstaffing’ problem in IR. It is often said that one
reason for the high ‘operating ratio’ of IR is the
extremely high wage bill. To what extent do you agree
with this observation? In what ways do you think the
use of AI and other technological enhancements will
mitigate this problem?
The Indian Railways is a vital part of India's transportation infrastructure, responsible for the
movement of millions of passengers and tons of freight every day. However, the organization
has faced challenges in recent years, including issues with overstaffing and high operating
ratios.
One of the reasons often cited for the high operating ratio of the Indian Railways is the high
wage bill. According to a study by Satish Chandra, the Indian Railways is, in fact,
overstaffing. The study states that the organization has 30 Railway departments, with the
engineering department having the highest number of employees, over 300,000.
The Indian Railways is the largest employer in India, with a workforce of over 1.3 million
people. The organization is divided into separate verticals, including traction, engineering,
traffic, rolling stock, signalling, materials, personnel, RPF, finance, health and safety. It is
divided into 18 administrative zones, headed by general managers, which are further
subdivided into 71 operating divisions, headed by divisional railway managers.
In terms of human resources, the Indian Railways employs a large number of non-gazetted
employees, who make up 98.5% of the total workforce. These employees are recruited
through exams conducted by the Railway Recruitment Control Board (RRCB) and Group D.
The organization also provides housing, healthcare, and education facilities for its employees.
The Indian Railways is a vital part of India's transportation infrastructure, responsible for the
movement of millions of passengers and tons of freight every day. While the organization
faces challenges in terms of overstaffing and high operating ratios, it is also making efforts to
modernize its operations and reduce its carbon footprint. With a workforce of over 1.3
million people, it is one of the largest employers in India and plays a crucial role in the
country's economic development.
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Indian Railways: Workforce and Efficiency
● The Indian Railways has a workforce of over 1.3 million people.
● The engineering department has the highest number of employees, over 300,000.
● The Indian Railways is divided into 18 administrative zones and 71 operating
divisions.
● The Indian Railways employs a large number of non-gazetted employees, who make
up 98.5% of the total workforce.
● The Indian Railways has implemented measures such as the extension of an
automated fire alarm system to all air-conditioned coaches and GPS-enabled tracking
of trains to address safety issues.
● The Indian Railways has removed all unstaffed level crossings by 2019 and replaced
staffed level crossings with bridges.
● The Indian Railways has implemented measures such as the extension of an
automated fire alarm system to all air-conditioned coaches and GPS-enabled tracking
of trains to address safety issues.
● The Indian Railways has removed all unstaffed level crossings by 2019 and replaced
staffed level crossings with bridges.
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Reason for high operating ratio
One common explanation for the Indian Railways' high operating ratio—which has given
cause for concern—is the company's extraordinarily high labor bill. Numerous sources that
emphasize the substantial influence of salaries on the Indian Railways' financial performance
bolster this assertion.
The Indian Railways' operational ratio for the 2019 fiscal year was 97.29%, as reported by
The Federal. This means that a significant amount of the income was allocated to operating
costs, which includes wages. This highlights the impact that employee-related expenses may
have on an organization's financial health by mentioning the difficulties that the Indian
Railways' large pension load has caused.
Similar to this, a story from The Wire describes how, in one year, the Indian Railways'
operating ratio increased to 98.5%, indicating the financial strain the company was under
from its spending habits, which included salaries and operating expenses. The significance of
the labor expense in relation to the Indian Railways' high operating ratio is highlighted by this
statistic.
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Moreover, the study on the financial turnaround of the Indian Railways conducted by the
Crawford School of Public Policy highlights the impact of salary scales and pension costs on
the organization's financial performance. The implementation of the Fifth Pay Commission in
1997 led to a substantial increase in the total wage bill of the Indian Railways, further
exacerbating the financial burden associated with employee-related expenses.
In light of the statistical data and analysis provided by these sources, it is evident that the high
wage bill of the Indian Railways plays a significant role in driving up the operating ratio of
the organization. The substantial allocation of funds towards wages and pension costs has
implications for the overall financial sustainability and efficiency of the Indian Railways,
highlighting the need for strategic management of human resources and cost control measures
to improve the organization's operating performance.
Therefore, based on the information presented in these sources, it is reasonable to agree that
the extremely high wage bill within the Indian Railways contributes significantly to the high
operating ratio observed in the organization. Addressing this challenge through effective cost
management strategies and workforce optimization measures is crucial for enhancing the
financial viability and operational efficiency of the Indian Railways.
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USE OF AI:
The use of AI and other technological enhancements can significantly mitigate the problem
of overstaffing and high operating ratios in organizations like the Indian Railways, where a
high wage bill is a contributing factor. By leveraging advanced technologies, such as AI,
automation, and data analytics, organizations can optimize workforce management, improve
operational efficiency, and reduce unnecessary costs associated with overstaffing.
Below are the AI and technological enhancements that can specifically address the challenges
posed by overstaffing and high operating ratios in organizations like the Indian Railways:
Advantages of harnessing artificial intelligence for railways operations
AI-Powered Workforce Planning:
● Forecasting Demand: AI algorithms analyze historical data, passenger traffic
patterns, and freight volumes to predict future staffing needs accurately. By aligning
staffing levels with demand, organizations can avoid overstaffing.
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● Optimal Staffing Recommendations: For different routes and services within the
Indian Railways, AI can recommend optimal staffing levels based on real-time data
and historical trends.
Automation of Routine Tasks:
● Ticketing Systems: Automated ticketing systems reduce manual intervention,
streamline processes, and minimize the need for additional staff.
● Maintenance Scheduling: Automation optimizes maintenance schedules, ensuring
timely inspections and reducing reliance on excessive maintenance staff.
● Inventory Management: AI-driven inventory management systems optimize
resource allocation, minimizing overstaffing in inventory-related roles.
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Data Analytics for Performance Optimization:
● Key Performance Indicators (KPIs): Data analytics tools track workforce
performance, resource utilization, and operational efficiency. Insights from KPIs
guide decision-making.
● Efficiency Improvements: By analyzing train schedules, passenger flow, and crew
performance data, organizations identify bottlenecks and inefficiencies. Addressing
these areas optimizes staffing.
Remote Monitoring and Maintenance:
● IoT Devices: Real-time tracking of train operations, equipment performance, and
maintenance needs via IoT devices reduces the need for on-site staff.
● Proactive Issue Resolution: Remote monitoring allows organizations to address
issues, minimizing downtime and optimizing resource allocation proactively.
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Predictive Maintenance:
● Equipment Health Monitoring: AI predicts equipment failures before they occur.
Timely maintenance prevents unexpected disruptions and reduces the need for
excessive maintenance staff.
● Resource Optimization: By avoiding unplanned breakdowns, organizations allocate
maintenance resources more efficiently.
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Employee Training and Upskilling:
● Continuous Learning: Technology facilitates employee upskilling. Training
programs focus on AI-related competencies, ensuring that staff can adapt to evolving
technologies.
● Agile Workforce: A skilled and adaptable workforce reduces the need for excessive
staffing levels.
Summary:
The Indian Railways, as one of the largest employers in India with over 1.3 million
employees, faces significant challenges such as overstaffing and high operating ratios, which
are largely attributed to a substantial wage bill. The organization's operating ratio has been
alarmingly high, with figures such as 97.29% in the 2019 fiscal year, indicating that most of
its income is consumed by operating expenses, particularly employee salaries and pensions.
This financial strain is exacerbated by the large number of non-gazetted employees and
extensive staffing across its numerous departments and zones.
To address these issues, the Indian Railways has been implementing various technological
and operational improvements. These include automating systems like ticketing, enhancing
maintenance scheduling through automation, and employing data analytics to optimize
performance and resource allocation. Furthermore, the adoption of AI can further help in
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workforce planning, optimizing staffing based on real-time data and demand forecasting, and
enabling predictive maintenance through remote monitoring technologies.
By leveraging AI and automation, Indian Railways aims to streamline operations, reduce
unnecessary labor costs, and improve overall efficiency, thereby potentially lowering its
operating ratio and enhancing financial sustainability. This strategic integration of technology
is crucial for mitigating current challenges and ensuring the future viability of this vital
transportation network.
References:
[Link] Chandra, "SATISH CHANDRA aref dianati - [Link]", [Link], 2019.
[Online]. Available: <[Link]
2."The Crisis of Public Transport in India: Overwhelming Needs but Limited Resources",
ScienceDirect, 2022. [Online]. Available:
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