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Between 2004 and 2008, Indian Railways has not been able to perform to its potential. Normally, Railway's revenue grows by two percentage points higher than the growth of Indian economy. According to Railway's own statistics, its revenues growth rate was two percentage points lower than the growth rate of Indian GDP in each of these four years. The main problem is a severe capacity constraint that does not allow the Railways to carry more freight even when there is demand. Freight traffic has grown by an average of over 9 percent in the last four years but in order to grow further the railways have to concentrate on infrastructure development. The central government recently set up the National Transport Development Policy Committee to suggest measures to promote greater commercial orientation of transport services in the country.
The committee is chaired by Dr. Rakesh Mohan, former deputy governor, Reserve Bank of India, who earlier headed the expert group on Railways that recommended corporatisation of the railway administration in 2002. This might be the right time for the government to consider taking a second look at railway reforms. A senior officer concerned with transport infrastructure planning in the country said that the committee was likely to recommend a few measures in the direction of railway reforms and that there would soon be consultations in this regard with policy-makers and experts.
This would not be a moment too soon. Railways desperately needs to grow its revenues because its expenses have shot up. Its ordinary working expenses grew by 7.3 percent in the years between 2004-05 and 2007-08, but jumped by 32 percent in the next year on account of the pay commission. A newspaper report pointed out that the railway surplus too has dwindled to Rs. 1 crore from over Rs 4,400 crore the last fiscal.
“The Indian Railways is at a crossroad where business as usual is not sustainable in the long run. If Railways has to be protected as the country’s growth wagon, transformation of the governance structure and augmentation of the accountability levels for delivery and performance is a must,” says infrastructure expert Akhileshwar Sahay who has studied railway reforms across the world. So what can Railways do? Experts on railway restructuring around the world say that a mix of reforms done in Japan and Argentina could solve key problems. There are a couple of problem areas that need attention right away . Some of these can be solved through Japanese style reforms (for administration) while the others will need the Argentinean method (exit non-core businesses).
 
Q. “The Indian Railways is at a crossroad where business as  usual js not sustainable in the long run.” implies:
  • a)
    The Railways is headed for a big disaster.
  • b)
    If the Railways does not undergo reforms, it will hinder the county's growth.
  • c)
    If the Railways continue to function poorly, we will have to depend on other modes of public transport.
  • d)
    The Railway Ministry has to reconsider the use of abundant resources for its sustainability.
Correct answer is option 'B'. Can you explain this answer?

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Answers

Sham Lal
Jul 21, 2020
Related Between 2004 and 2008, Indian Railways has not been able to perform to its potential. Normally, Railwaysrevenue grows by two percentage points higher than the growth of Indian economy. According to Railwaysown statistics, its revenues growth rate was two percentage points lower than the growth rate of Indian GDP in each of these four years. The main problem is a severe capacity constraint that does not allow the Railways to carry more freight even when there is demand. Freight traffic has grown by an average of over 9 percent in the last four years but in order to grow further the railways have to concentrate on infrastructure development. The central government recently set up the National Transport Development Policy Committee to suggest measures to promote greater commercial orientation of transport services in the country.The committee is chaired by Dr. Rakesh Mohan, former deputy governor, Reserve Bank of India, who earlier headed the expert group on Railways that recommended corporatisation of the railway administration in 2002. This might be the right time for the government to consider taking a second look at railway reforms. A senior officer concerned with transport infrastructure planning in the country said that the committee was likely to recommend a few measures in the direction of railway reforms and that there would soon be consultations in this regard with policy-makers and experts.This would not be a moment too soon. Railways desperately needs to grow its revenues because its expenses have shot up. Its ordinary working expenses grew by 7.3 percent in the years between 2004-05 and 2007-08, but jumped by 32 percent in the next year on account of the pay commission. A newspaper report pointed out that the railway surplus too has dwindled to Rs. 1 crore from over Rs 4,400 crore the last fiscal.The Indian Railways is at a crossroad where business as usual is not sustainable in the long run. If Railways has to be protected as the countrys growth wagon, transformation of the governance structure and augmentation of the accountability levels for delivery and performance is a must, says infrastructure expert Akhileshwar Sahay who has studied railway reforms across the world. So what can Railways do? Experts on railway restructuring around the world say that a mix of reforms done in Japan and Argentina could solve key problems. There are a couple of problem areas that need attention right away . Some of these can be solved through Japanese style reforms (for administration) while the others will need the Argentinean method (exit non-core businesses).Q. The Indian Railways is at a crossroad where business as usualjs not sustainable in the long run. implies:a)The Railways is headed for a big disaster.b)If the Railways does not undergo reforms, it will hinder the countys growth.c)If the Railways continue to function poorly, we will have to depend on other modes of public transport.d)The Railway Ministry has to reconsider the use of abundant resources for its sustainability.Correct answer is option 'B'. Can you explain this answer?
Option 1 does not mention the crossroads and can be ruled out.
Option 3 is too extreme. Option 4 talks about reconsidering resource utilization but does not stress on the future consequences. The word “crossroad” in the quoted text meaning ‘a point at which a crucial decision must be made which will have far- reaching consequences’ is crucial here. Option 2 talks about the necessity for reforms and the consequences if the Railways fails to implement them.
Hence, the correct answer is option 2.

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Question Description
This question for CAT 2022 is part of CAT preparation. The Question and answers have been prepared according to the CAT exam syllabus. Information about this question covers all topics & solutions for CAT 2022 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Between 2004 and 2008, Indian Railways has not been able to perform to its potential. Normally, Railwaysrevenue grows by two percentage points higher than the growth of Indian economy. According to Railwaysown statistics, its revenues growth rate was two percentage points lower than the growth rate of Indian GDP in each of these four years. The main problem is a severe capacity constraint that does not allow the Railways to carry more freight even when there is demand. Freight traffic has grown by an average of over 9 percent in the last four years but in order to grow further the railways have to concentrate on infrastructure development. The central government recently set up the National Transport Development Policy Committee to suggest measures to promote greater commercial orientation of transport services in the country.The committee is chaired by Dr. Rakesh Mohan, former deputy governor, Reserve Bank of India, who earlier headed the expert group on Railways that recommended corporatisation of the railway administration in 2002. This might be the right time for the government to consider taking a second look at railway reforms. A senior officer concerned with transport infrastructure planning in the country said that the committee was likely to recommend a few measures in the direction of railway reforms and that there would soon be consultations in this regard with policy-makers and experts.This would not be a moment too soon. Railways desperately needs to grow its revenues because its expenses have shot up. Its ordinary working expenses grew by 7.3 percent in the years between 2004-05 and 2007-08, but jumped by 32 percent in the next year on account of the pay commission. A newspaper report pointed out that the railway surplus too has dwindled to Rs. 1 crore from over Rs 4,400 crore the last fiscal.The Indian Railways is at a crossroad where business as usual is not sustainable in the long run. If Railways has to be protected as the countrys growth wagon, transformation of the governance structure and augmentation of the accountability levels for delivery and performance is a must, says infrastructure expert Akhileshwar Sahay who has studied railway reforms across the world. So what can Railways do? Experts on railway restructuring around the world say that a mix of reforms done in Japan and Argentina could solve key problems. There are a couple of problem areas that need attention right away . Some of these can be solved through Japanese style reforms (for administration) while the others will need the Argentinean method (exit non-core businesses).Q. The Indian Railways is at a crossroad where business as usualjs not sustainable in the long run. implies:a)The Railways is headed for a big disaster.b)If the Railways does not undergo reforms, it will hinder the countys growth.c)If the Railways continue to function poorly, we will have to depend on other modes of public transport.d)The Railway Ministry has to reconsider the use of abundant resources for its sustainability.Correct answer is option 'B'. Can you explain this answer?.
Option 1 does not mention the crossroads and can be ruled out.Option 3 is too extreme. Option 4 talks about reconsidering resource utilization but does not stress on the future consequences. The word crossroad in the quoted text meaning a point at which a crucial decision must be made which will have far- reaching consequences is crucial here. Option 2 talks about the necessity for reforms and the consequences if the Railways fails to implement them.Hence, the correct answer is option 2.