Indian Railways is life line of nation providing affordable and comfortable transport services to passengers and the largest and economical carrier of bulk goods. To meet the demands, manufacturing and creation of assets and the maintenance thereof in good fettle is a very crucial aspect. However, there it finds challenges like obsolescence of machinery and plant, complexities of diverse product mix and infrastructural bottlenecks during its operation. For example, the percentage of over aged machines over IR had increased from 47% in 1952 to 77% in 1979. This was an obstacle to meet the production and maintenance services for a growing economy like India. However, this also entailed a massive investment; hence an agreement was negotiated with the International Development Association of the World Bank for providing a credit of $95M for the first phase of workshop modernisation programme that was envisaged to be completed during 80s. The unprecedented magnitude of this effort prompted the Government of India to set up a special organisation dedicated to these endeavours, leading to establishment of Central Organisation for Modernisation of Workshops (COFMOW) in 1979. This was followed by second and third phases of modernization for another 7 years with IDA credits of Rs.400 crores.