Privatisation of Indian Railways: Reform on the wrong track?

Until recently, the railway sector was placed entirely under the public domain because the Indian Railways is not just a transporter of passengers and goods, but it also a strategic and social welfare organisation. Strategic because it works as the backbone of the economy, and social welfare organization because it helps millions of poor people to travel across the country, especially the migrant workers, and because it is the largest employer of the country.

Considering how critical the Indian railways is, it has always been retained under the public domain. But now the government has started to open up for the privatisation of Indian Railways and it has already allowed the launch of private trains, along with some other services to the private sector.

The proposed privatization of the Indian Railways could negatively affect the maintenance, operations, and welfare. Can the proposed reforms be seen as big reforms on the wrong track? Let us carry out a balanced analysis.

See, even though the Indian Railways has been the backbone of the economy, it is quite infamous for its efficiency and poor quality of service. So in this regard, introducing reforms in the railway sector and its privatisation can bring in a number of advantages.

PROS

  1. The participation of private players can help the Indian Railways to induct modern technology.
  2. It can help the railways provide better amenities and better facilities to the passengers, resulting in a good experience.
  3. Greater privatisation will also bring in greater efficiency and managerial practices like the on-time running of rails. This efficiency can also result in bringing down operational and maintenance cost.
  4. Privatisation will also bring in competition, which will also provide more choice to the customer and will automatically lead to a rise in the quality of services being provided.

But however, the privatization of Indian Railways, if not executed well, can have its own set of drawbacks.

CONS

  1. The biggest concern about going private is that it might take away the social welfare nature of the railways because the private sector is always driven by the profit motive.
  2. This profit-making nature of the private sector might also result in a compromise in the safety standards.
  3. Privatisation might lead to an unsubstantial increase in fare prices which can make train travel unaffordable, especially for the weaker sections and the poor, restricting their ability to move across the country.
  4. Not just the passengers would be affected, but any increase in the transportation cost of goods will directly translate to the increased cost for the consumer.

What is your take on the privatization of Indian Railways? Tell us in the comments below.

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