New Delhi: Ratan Tata , chairman emeritus of Tata Sons Ltd , will head Kaya Kalp, a committee formed to suggest innovative ways to transform the Indian Railways, the government said on Thursday.

Railway minister Suresh Prabhu had announced forming such a permanent council when he presented the budget on 26 February.

“Every dynamic and thriving organization needs to innovate and reinvent its practices. In accordance with the vision of Hon’ble Prime Minister for innovation, technology development and manufacturing, we intend to set up an innovation council called Kaya Kalp for the purpose of business re-engineering and introducing a spirit of innovation in railways," Prabhu said while presenting the budget.

The council will include representatives of All Indian Railwaymen’s Federation (AIRF) and National Federation of Indian Railwaymen (NFIR), which represent railway employees. Other members are yet to be appointed.

The railway budget laid a roadmap for reforms of the national carrier plagued by inefficiencies and financial constraints.

Railways has struggled to bring down its operating ratio, a key efficiency parameter, to below 90% for the past seven years.

It hopes to improve it to 88.5% in the fiscal year starting

1 April from the estimated 91.8% in the year to 31 March.

Indian Railways is estimated to generate a surplus of ₹ 7,278.46 crore in 2014-15 and expects to nearly double that to ₹ 14,265.71 crore the following year even as a white paper released by the ministry on 26 February estimated pending projects alone require ₹ 2 trillion to complete.

Prabhu has emphasized the need to transform railways and the council is expected to make recommendations for the same after consultations with various stakeholders.

In a bid to encourage private-sector participation in railways, Prabhu had announced measures such as setting up an independent regulator and a transport logistics corporation among others in the railway budget.

The ministry is waiting for the cabinet’s nod, said M.S. Mathur, executive director at the ministry. He was speaking at an event organised by PHD Chamber of Commerce and Industry, a lobby group. “The cabinet clearance is keenly awaited for setting up of Logistics Corporation of India. The railways have already moved a cabinet note to this effect. We expect the new entity would be created in the next 4-5 months to attain the objectives of implementing railways projects through the public-private-partnership route."

Railways, which has been losing traffic to roads, hopes to improve its share in the freight business by setting up a logistics firm to develop user facilities and provide end-to-end logistics solutions.

Of the proposed independent regulator for determining tariff, fixing performance standards and resolving disputes, Mathur said its appointment will take a year.

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