Is It Possible to Privatization Of Indian Railways?...

Indian Railways is the largest employer in India providing employment to around 1.6 million people. For the first time in a decade, the Government could not help itself from increasing fares because of the massive financial crisis it is facing. 

          Over the years, Indian Railways have shown itself successfully as the most preferred common-man’s transporting system.

How railways could charge such low fares?

          The main reason is that the British Government, which governed us had laid rails all over the country before 150 years itself. The Roadways on the other hand, lend contracts to Private for laying roads and hence had to price 2 to 3 fold than Railways. 

          With no big investment needed to lay out rails, only the operating costs like fuel costs, maintenance costs, etc., required and that is why they are able to charge such low prices.

The Reason for Downfall:

In spite of having so many advantages over other transportation systems all it needed was to manage profits in an effective way, which the Railways could not.

They were criticized for various reasons like time delay, unhygienic toilets inside the trains and in Railway stations, and the major reason being the accidents that kill thousands of people every year. 

How would Privatization help Indian Railways?

          With the various FDI policies amended, the Railways can look forward to blend in some new blood to offer services. It is doubtless that the quality of services in Railways will improve due to the competition.

Imagine a train running from Mumbai to Delhi in less than 2 hours. Would not that portray India as a developed country? Better Competition leads to better infrastructure and hygiene facilities. Privatization is good for Indian Railways.

But,…… Is it Possible??

People say we did manage to Privatize Insurance sector, why not Railways. But is it as easy as we think? 

Let us have a look at some of the constraints which are holding up Privatization until now.

·         ·         Huge Investment Required to lay rails around the country

·         ·         Land Acquisition Problems because many rails passes across various Public Property

·         ·         Safety and Security Reasons towards Private Companies

·         ·         Employees Concern - We discussed earlier that Railways has the largest number of employees in the country, so Privatization means few employees have to be sent out of Government Jobs

When Can It Be Possible – The Solution:

When Privatization can offer so many benefits, why not we try implementing so that it improves the quality of service?

Let us have a look at some of the possible solutions that can be made to implement Privatization:

·         ·         We can let the Private Sector to operate on selected routes because presently there are many routes which are over burdened throughout the year. 

·         ·         Not only in peak seasons but in weekdays also we find reservation in trains on these sections very hard due to lack of trains and heavy traffic.

e.g.,  Mumbai-Indore route, Commercial Capital of country with Commercial Capital of Central India, has only one daily train!

·         ·         Allot non-performing slots to the new Private Entrants

          Who would not like hygienic toilets, better food quality and availability of services?

Imagine the scenario where Private players provide more trains on such sections! We do not need to mention the better quality of trains and on board services they will bring with them. 

 Our Country has a very good experience of Privatization in Aviation Industry and that should be a good enough experience and reason to give it a try in Railways also.

My View..

In my opinion, Indian Railways should never be privatized simply because it is not just a profit making firm that runs trains in India. It is the largest employment scheme ever deployed by the Indian government. Privatization of Railways will lead to ‘optimization of corporate resources’, and millions of Indians will lose their livelihood.

I didn't agree for privatization of Indian Railway. I can't understand why people are thinking for privatization.. ? Why we don't think to solve a problem, we always complain everything.. If the Govt  sector is not working properly or they have some problem's then we need to support them.. Some of Govt sector like telecommunication [BSNL] is in loss and they have some problems after privatization like network consumption, no service, connection errors etc.

There are multiple reasons, why Indian railways shouldn't be privatized. 

1. It's huge, no one can buy it. Think about lands that Indian railway owns in Mumbai and Delhi and other major cites. 

2. It’s not cheap, but still cheaper. Consider a the two busiest railway station - Mumbai and Ahmedabad - the route only cost 1800 Rupees in 2 tier AC reserved seat with free meals. That's less than 30 USD. If you go to Japan (Osaka to Tokyo - 500 KM) or Canada (Toronto to Montral - 500 KM) you would need to pay almost 3-4 times more money for the  same services, Just in case if bill gates and warren buffet finds someone (still if they can buy it) and if they could buy Indian railway, they would wish to get their money returned, and for that they would increase their ticket and logistics price. 

3. It's also not in favor of Indian economy - as many companies is depended on Indian railway for their logistics, and they won't get the same price.

4. if it goes to certain company - they won't allow a "pass" for daily commuters for a few hundred bucks. Imagine how many people travels almost 150 KM one way daily for going to their jobs? Will a buyer company allow them to travel that much distance for just few hundred rupee a month? 

5 We cant implement technology in near future. It is not because of whether other countries
Using or it, it is the need of the hour. How can we think that it is not Suiting for us? If we think negatively our railway system will not develop. The mentioned routes are apt for bullet train service. So the railway has to take bold steps soon in this regards.

Written By M.Ajmal Khan.