Privatization in railways

The reference

railways: After India’s first primary train Tejas Express, NITI Aayog has now paid for the privatization of operations of some other trains and railway stations in the country. It is impressive that NITI Aayog is working on a comprehensive plan which envisages the overall development of the area around railway stations and is estimated to have a strong potential to attract private investment. It is known that India has the fourth largest rail network in the world after the US, China and Russia. According to an estimate, the Indian Railways moves about 25 million people from one place to another every day and has about 1.3 million employees for this task. It is noteworthy that the entire infrastructure of the Indian Railways is syllabus by the Railway Board and has a portfolio on Indian Railway services, but the subject of privatization has been the focal point of discussions in the Indian Railways in the last 2 decades. It is true that the Indian Railways deserves praise for delivering the film in the world’s largest democracy, but some aspects like casual, food and punctuality etc. have faced criticism from time to time and In the same way, criticisms have also given privatization to the Indian Railways.

By personalization

  • Private privatization refers to the transfer of state government and major undertakings to private owners. It is important that it has become an important policy tool around the world.
  • For the past few decades, the debate of superiority in the private and social field has become very strong and for this reason, privatization has also been at the center of discussions.

Privatization objectives

  1. Reducing government claims
  2. Promote happiness
  3. Improve Arab Finance
  4. Reduce common interference
  5. Improve quality


Indian Railways – Vikas Yatra and Privatization

  • The history of railways in India is several decades old. It is to be noted that commercial train journey in India started in the year 1853, after which the Indian Railways came in the time of the then government in 1900.
  • The first electric train of the country was run between Bombay to Kurla in the year 1925.
  • After independence in 1947, India inherited an old rail network and about 40 percent of the former rail network went to the part of newly formed Pakistan. In such a situation it was felt that some lines should be repaired and some new lines should be laid so that areas like Jammu could be connected to other parts of the country.
  • In the year 1952, it was decided to convert the erstwhile rail network into zones and in the same year a total of 6 zones came into existence.
  • Earlier, railway-related production was very less in the country, but as the country developed, railway-related production also started inside the country.
  • The number of zones was increased to 12 with the aim of strengthening the administration in September 2003, after which the number of railway zones was increased on several other occasions and currently there are a total of 17 zones in the country.
  • As the railway network developed in the country, difficulties in the operation and management of railways also came to the fore and new options were being explored to deal with these challenges. Many experts began to see the privatization of railways as a similar option.
  • In 2019, India’s first primary train Tejas Express was launched between Lucknow to New Delhi, which was considered a major step towards privatization in the railways.
  • It is noteworthy that at present the government is planning to attract private investment for the overall development of some sections in the country and if this happens, it will be the second major step towards privatization in the Railways.

Due to privatization in railways

  • Indian Railways comes in the list of selected government-owned undertakings which are facing losses year after year.
  • Indian Railways has failed to keep pace with the modernization of its infrastructure and services. However, work is currently going on in this direction.
  • Railways have failed to satisfy customers regarding its services such as ticketing, food items, coach maintenance and ticket checking etc. and this is the main reason for resentment of the general public towards the Railways.
  • Even at the technical level, railways have not been able to achieve high standards of quality of services and this is the reason that reports of railway accident come up from time to time.
  • Apart from this, the time management of trains also exists as a major challenge before the Indian Railways.
  • The recommendations of the Bibek Debroy Committee set up in 2014 to formulate a policy for reforming the Indian Railways may prove helpful in this context.

Bibek Debroy Committee

  • In 2014, the Railway Board constituted a committee to raise resources for major railway projects and to restructure the Railway Board.
  • This committee submitted its report in the year 2015 and favored privatization of railway coaches and engines.
  • Key recommendations of the committee
  1. Formation of a separate company for railway infrastructure.
  2. Opening of train operations to private people.
  3. Indian Railways should adopt national and international standard standards except for its complicated accounting method.
  4. Various means of recruitment in Indian Railways should be streamlined.
  5. There is a need for decentralization at lower levels in the railways.
  6. Private sector should be allowed to run goods and passenger trains.
  7. Railways should work closely with state governments in the construction of new lines.

What will be the benefit of privatization

  • Better infrastructure

An argument is made in favor of privatization that this will promote better infrastructure and better facilities will be available for the passengers. It is expected that with the entry of private companies in the railways, better management will be possible.

  • Balance between quality and rent

Probably the biggest complaint people get from the railways is that the quality of services provided does not match the payment made by the passengers. The advocates of privatization in Railways believe that the above problem can be easily addressed after this.

  • Crash reduction

Many studies have revealed that lack of maintenance is the main cause of train accidents in the country and privatization advocates believe that if we have to stop these accidents then the private sector will have to allow entry.

  • Increase competition
    As of now, the Railway Board has a monopoly in the railways, but through privatization, the monopoly in this sector can be brought to competition, so that customers can be better facilitated.

Loss of privatization in railway

  • Limited coverage
    If the railway remains owned by the Government of India, its biggest advantage is that it provides nationwide connectivity regardless of profit. But this will not be possible with the privatization of railways, because the main purpose of private enterprises is to make profit and they stop working in the area which does not benefit.
  • Social justice
    The sole purpose of private enterprises is to make profit and the simplest way to make a profit in railways is to increase the fares and if this happens, it will have the greatest impact on the common citizens.
  • Accountability
    Private companies are unpredictable in their behavior and lack of accountability, due to which the question of their use in important areas like railways becomes important.

    The conclusion

    It cannot be denied that there are no challenges before the Railways in the country, but unilateral challenges cannot be solved by privatization, so it is necessary that a balanced approach is adopted and all aspects taken into account.

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