Cost Competency Posture of Railway Budget 2016

Abstract

The Railway Budget 2016 outlines several professional propositions that can make the Indian Railways get-going despite the legacy costs loaded on it for complex considerations. These are the propositions that can provide the Indian Railways a competitive posture towards perfecting affordable passenger fares and compatible goods tariff. In his budget speech, the Railway Minister outlines the core objective of the Indian Railways as 'to improve the quality of customer experience at the individual level, become an engine of employment generation and economic growth at the national level and convert India's largest institution into a template for transformation'. Mission beyond book-keeping is initiated with the objective of adopting accounting practices that would aid detailed assessment of unit costs. Railway Minister considers this as a structural change which forms the bedrock of transformation, as right accounting would determine right costing and hence right pricing and right outcomes. This is an exclusive initiative that can augur competitive cost synergy for the Indian Railways. The need, however, would be to carry forward the momentum towards Competitive Cost Management Systems and Practices.