Reforming the Railways

This refers to ‘High time Railways changed tracks’ (August 1). Indian Railways has the world’s fifth largest railway network. It also has huge land parcels and other assets which can be monetised in several ways. If on both the freight and passenger fronts, the Railways is losing market share then it is a serious cause for concern. Merely increasing the speed of all trains will not change its fortunes. The Railways will have to find ways and means to reduce its operating ratio and run the network like a professional organisation. A huge cultural transformation has to take place, which is easier said than done considering the clout of the labour unions. Besides, privatising regional services can lead to optimum utilisation of capacity. Lesser number of accidents is good news, but productivity too must go up. The bottomline is that unlike Air India, the Railways cannot be allowed to fail. Hence the government needs to call upon all the stakeholders to help device a clear roadmap for the Railways.

Noida

This refers to the article ‘The gentleman leader’ (August 1), on Subir Gokarn, a brilliant economist and former Deputy Governor of RBI, who passed away on Wednesday. During a BANKON conference in Mumbai, I had the privilege of having a short interaction with Gokarn. I tossed the idea of introducing ‘asset creation multiple’, in place of the prevailing ‘capital adequacy ratio’. He had the patience to listen to me, when I explained the idea in to him.

In banks, asset creation is an activity that is subsequent to capital formation and deposit mobilisation. So, ideally, the proposition should be: For a given capital held by the bank, what quantum of asset can be created without exposing the bank to high risk? That is to say, instead of minimum capital adequacy ratio of 9 per cent, implying holding of ₹9 by way of capital for every ₹100 risk-weighted assets, stipulation of maximum asset capital multiple of 11.11 times (100/9), implying that asset can be created to the maximum extent of 11.1 times of capital, would be more meaningful and relevant.

Gokarn took in the idea very quickly and responded spontaneously, saying it was a good idea but there won't be takers at the higher and government levels, because CAR is a business expansion-oriented ratio whereas ACM is a business limiting ratio, though it suits from the risk management point of you. Such was his clarity of thought. His demise is an irreparable loss, indeed.

Bengaluru

This refers to ‘Bitter brew’ (August 1), on VG Siddhartha’s tragic demise that has raised concerns about tax terrorism. It is rare that a Finance Minister of a government running a worrisome fiscal deficit, year after year, should resort to Tamil Sangam literature to advise her taxmen not to be blindly aggressive in collections — like rampaging elephants in the paddy field.

Unfortunately, the message has come too late. The BJP-led government primarily used demonetisation to drain the funds of the opposition on the eve of the UP elections.

As a spin-off, there is ready access to huge data on personal finances, which it employs as political leverage through agencies as Income-Tax Department, Enforcement Directorate, etc.

To expect officers of these institutions, busy cultivating political patronage, to develop an ear for poetry overnight is utopian.

Navi Mumbai

It is unfortunate that the board of the Indian Railways has made it compulsory to attach ID-proof along with RTI applications. The RTI was, and still is, for transparency, fairness, and information.

If the Railways has started asking for ID-proof from RTI applicants, it is morally wrong, to say the least. There is enough safeguards in the Act to deny information to RTI applicants. Also, the recent move to amend the RTI Act would encourage more rigidity, and lack of transparency in the system. Let us not be tempted to flash back to the mid-1970s when Emergency loomed large in the name of executive power, and opaqueness.

LETTERS TO THE EDITOR Send your letters by email to bleditor@thehindu.co.in or by post to ‘Letters to the Editor’, The Hindu Business Line, Kasturi Buildings, 859-860, Anna Salai, Chennai 600002.

Nagaon, Assam

COMMENT NOW