Case Of a Company

History

The first step for the rail system in India was put forward in 1832. Two Railway companies were started under the assistance of East India Company. Due to Interest of investors in the UK led to the rapid creation of a rail system over the next few years.

Then a few years later, in 1853, the first passenger train between Bori Bunder, Bombay and Thana covering a distance of 34 km (21 miles) was inaugurated, which formally gave a way to the birth of Railways in India.

In 1951 the government nationalized the system as one unit, becoming one of the largest networks in the world.

Brief introduction 

Indian Railways operates 8,702 passenger trains and transports around 5 billion annually across 27 states and three union territories (Delhi, Pondicherry and Chandigarh). This mode is the most preferred for long distance transport in most parts of the country. In India a standard passenger train consists of 18 coaches, but some popular trains can have up to 24 coaches. Coaches are designed to accommodate anywhere from 18 to 72 passengers. The coaches in use are vestibules. Freight trains use a large variety of wagons. Each coach has different accommodation class in which the most popular being the sleeper class.

Many cities in the states all over the country have their own dedicated suburban networks to cater to commuters. Currently, suburban networks operate in Mumbai (Bombay), Chennai (Madras), Kolkata (Calcutta), Delhi, Hyderabad and Pune.

Vision

“To become a leading provider of high quality travel, tourism and hospitality related services in the country. ”

Mission

• Protect and safeguard railway passengers, passengers area and railway property
• Ensure the safety, security and boost the confidence of the travelling public in the Indian Railways

Objectives

• To become a user-friendly organization by means of constant innovation, HR development and technology driven
•  Consolidation and upgrade the services of catering in the developed sector
• To increase the productivity of manpower, optimizes resources through innovative marketing policies

Size of the industry

Indian Railways operates 7,566 locomotives,37,840 Coach vehicles and 222,147 freight wagons. There are a total of 6,853 stations; 300 yards; 2,300 goods-sheds; 700 repair shops and a total workforce of 1.54 million.

The Indian railway Industry has registered 13.87 % growth in revenue to Rs 57,863.90 crore in the first nine months ended December 31, 2008. While total earnings from freight increased by 14.53% at Rs 39,085.22 crore during the period, passenger revenue earnings were up 11.81% at Rs 16,242.44 crore. The railways have enhanced freight revenue by increasing its axle loading, improving customer services and adopting an innovative pricing strategy.

Top leading Companies

Number of Public Sector Corporations helps Indian Railways to maintain, develop and modernize its systems. These corporations are also ideal employers for a variety of job applicants. These companies are:

• Centre for Railway Information Systems (CRIS)
• Container Corporation of India
• Dedicated Freight Corridor Corporation of India
• Indian Railway Finance Corporation
• Indian Railways Catering and Tourism Corporation
• IRCON International Ltd.
• Konkan Railway Corporation
• Rail Land Development Authority
• Rail Vikas Nigam Limited
• Railtel Corporation of India
• RITES Ltd.

Railway Recruitment Boards conduct the mass recruitment of operational staff positions in Railways.

 Employment opportunities

Indian Railway Industry functions as a major employment generator in the country. Out of the 27 million people employed in the organized sector, Indian Railways industry accounts for 6% directly and an additional 2.5% indirectly. Indian Railways employees total about 1.6 million people.

Indian Railways Industry is divided in to 16 railway zones, which has the aim of efficient carrying out of operations, construction and maintenance of coaches, railroad construction, recruitment and maintenance of workforce. Each single zone is headed by a General Manager who reports to the Railway Board office. For each single zone there are Divisional Offices headed by Railway Divisional Managers who get the reports from divisional officer cadres such as divisional officer engineering, mechanical divisional officers, electrical divisional officers, signal & telecommunication divisional officers, divisional accounting officers & divisional personnel.

Organizational Structure

The Indian Railways is organised broadly by functional groups. This is traditionally how railways are organised the world over. The Indian Railways perhaps has been less adventurous in changing the structure; it has largely kept up what it got as a legacy from the British era.

The apex management organisation is the Railway Board also called the Ministry of Railways. The board is headed by a Chairman who reports to the Minister of Railways. The board has five other members in addition to the chairman.

Regional Organization

Zonal Management: The General Managers of the zonal railways and the production units report to the board. Indian Railways has divided itself into 16 zonal railways. Each zone, headed by a General Manager, is semi-autonomous and this creates a matrix organisation where the functional branches are under dual control viz.

• Operational Control at Zonal level
• Functional Policy & Guidance from the Railway Board 

Divisional Organization: The Divisional Railway Manager (DRM) heads the organisation at the division level. There are currently 67 divisions on the system nationwide. The divisions are primarily involved with train running but may have loco sheds (repair shops for locomotives), coaching depots (repair home bases for passenger trains) and wagon depots (repair and maintenance points for freight stock).

Each division has all the functional (both line and staff) organisations. The heads of these functional groups report to the DRM for administrative purposes but rely on guidance from the railway board and the zonal headquarters for policy guidelines.

HRM - Employment Management Policies

With over 13.6 Lakh employees, Indian Railways is one of the largest employers not only in India, but also in the world. The workforce of IR is a varied mass of people from the Gangman/Khalasi at one end to Chairman, Railway Board at the apex level. The task of the personnel department of Railways is to manage and look after the welfare of this large mass of employees and their families.

Functions of Personnel Department:

• Man Power Planning
• Recruitment
• Training and Development
•  Placement
•  Transfer
•  Performance Appraisal
• Promotions and Demotions
• Guidance on Disciplinary matters
• Wage and Salary administrations
• Settling Industrial Disputes
• Grievance Redressal
•  Incentives and Financial aids
• Settlement and Pension
•  Arranging Post retirement benefits and Grievance Redressal of Pensioners
• Setting up and maintenance of Welfare Activities

Expenditure Profile

Expenditure of the Railway is broadly divided into two categories, viz. Ordinary Working Expenses which includes Repairs, Maintenance, Operating Expenses, staff cost, etc. and Plan-Head Expenditure. Capital and the Plan-Expenditure vary on the basis of the priorities of the investments from year to year. The Components of Expenditure in Ordinary Working Expenses from 2006-07 up to 2010-11 shows a increase in expenditure due to effect of 6th CPC and other liabilities.

EXPENDITURE IN RAILWAY DURING THE LAST FIVE YEARS (FIGURES IN CRORES OF Rs)
DESCRIPTION	2006-07	2007-08	2008-09	2009-10	2010-11
SALARY RELATED COST	41.36	45.79	68.68	92.43	101.26
ELECT TRACTION	10.09	10.82	10.74	14.02	18.13
ELECT NON TRACTION	14.7	14.91	18.03	20.26	25.84
CONTRACTUAL PAYMENT	20.71	26.99	29.21	38.03	27.06
STOCK/NON-STOCK & OTHER EXP.	9.27	10.81	15.14	10.66	16.19
TOTAL	96.13	109.32	141.8	175.4	187.58

Gross and Net Salary of some Railway Jobs

Approximate Gross and Net Salary of Some Popular categories of Railway Jobs  after the implementation of 6 th Central Pay commission for direct recruits.

·         The current Rate of DA is 65% from Jan 2012 and it changes every six months. 

·         Salary after 1 year – this will be the salary on 1st July after completion of training period (with one annual increment).  As a rule of thumb it is assumed that the DA will go up by 10% in one year for the calculation.

·         During training no allowances except DA is paid.

·         HRA is calculated for ordinary cities(10%). It can be 20% or 30% depending on the city. It is same for Transport Allowance.

·         There are other allowances like TA which depends on your post.

Junior Engineer(JE of all categories) GP Rs.4200

		Stipend	After 1 year**
A	Pay	9300	9705
B	GP	4200	4200
C	Pay + GP	13500	13905
D	DA (65% of C)	8775	10429
E	HRA(10%of C)		1391
F	Transport Allowance		1400
E	Total	22275	27124
G	New Pension Scheme(10% of C)	1350	1391
H	Others	400	400
I	Total Deductions(G +H)	1750	1791
J	Net Pay(E-I)	20525	25334

Section Engineer(SE of all categories) GP Rs.4600

		Stipend	After 1 year**
A	Pay	12540	13054
B	GP	4600	4600
C	Pay + GP	17140	17654
D	DA (65% of C)	11141	13241
E	HRA(10%of C)		1765
F	Transport Allowance		1400
E	Total	28281	34060
G	New Pension Scheme(10% of C)	1714	1765
H	Others	500	500
I	Total Deductions(G +H)	2214	2265
J	Net Pay(E-I)	26067	31795

Company's Philosophy on Code of Governance

The Company looks upon Corporate Governance as an enterprise-wide endeavour targeted at value creation in the form of striking optimum balance between the profit it earns for its Shareholders and cost of funds transferred to the Ministry of Railways, which is also its Shareholder. This is sought to be achieved by conducting the business in a professional manner, using a combination of delegation and accountability amongst key executives in the Company; focussed attention and transparency in operations of the Company; skill upgrades through need-based training, etc.; and enhanced investor / lender satisfaction through timely debt servicing.

To foster best Corporate Governance practices, the Company has formulated a “Code of Business Conduct and Ethics for its Board Members and Senior Management” in June, 2008, which seeks to bring high level of ethics and transparency in managing its business affairs. The same has also been posted on the website of the Company.

Affirmation by all Directors and senior Officers of the Company to the effect that they have complied with and not violated the Code is required to be obtained at the end of each year. The requirement stands fulfilled for 2009-10. A declaration to this effect is duly signed by the Managing Director (CEO).

Awards & Distinction

• IRCON, a consistent winner of the Highest Foreign Exchange Earner Award in the construction sector
• IRCTC, won National award for e-governance for being  “Best Citizen Centric Application”, awarded the Genius of the Web Award for being the “Best E-Governance PSU Site”
• Indian Railways win 7 Gold Medals for India in 16^th Asian Games-2010
•  Indian Railways is more than 150 years old.
• It is the largest railway system in the world under one management.
• It is the world’s 4^th largest commercial or utility employer, by number of employees, with over 1.6 million employees.
• The Indian railway has the world's fourth largest railway network after those of the United States, Russia and China.
• New Delhi railway station received national tourism award for best tourist-friendly railway station.
• The Darjeeling Himalayan Railway, a narrow gauge train with a steam locomotive is classified as a world heritage site by UNESCO.

• Another world heritage site- The Nilgiri Mountain Railway in the Nilgiri Hills, the Chatrapati Shivaji Terminus(Formarly Victoria Terminus)

• The total number of railway station in India is more then 7,000.

Current Top Management Team

Name	Designation
Shri Mukul Roy	Minister
Shri K. H. Muniyappa	Minister of State
Shri Bharatsinh Madhavsinh Solanki	Minister of State
Shri Vinay Mittal	Chairman
Smt. Vijaya Kanth	Finance Commissioner
Shri kul Bhushan	Member(Electrical)
Shri A. P. Mishra	MemberEngineering()
Shri K. K. Srivastava	Member(Traffic)
Shri A. K. Vohra	Member(Staff)
Shri Keshav Chandra	Member(Mechanical)
Shri Shivaji Rakshit	Secretary
Shri Anil K. Gupta	CONCOR
Shri Rakesh Kumar Tandon	IRCTC
Shri Rajiv Datt	IRFC
Shri Mohan Tiwari	IRCON
Shri Bhanu Tayal	Konkan Railway
Shri Rakesh Saksena	RVCL
Shri R. K. Bahunguna	RAILTEL
Shri Rajeev mEHROTRA	RITES

SWOT Analysis of Company

Strength

• The 'biggest company' in the world in terms of  employee strength.
• Luxurious and affordable service provider to common man
• Connects different cities and countries
• Technological advancement

Weakness

• Corruption within the department
• Lack of accident proof magnetic wheels in all trains
• Lack of safety
• Poor infrastructure
• Delayed services

Opportunity

• "Metro" in commercial cities like Mumbai
• Development in small cities
• Profit through privatization

Threat

• Low cost airlines
• improvement of other transport networks like roadways
• Could be taken over by airlines