Thursday, January 5, 2012


India should privatise railways for better efficiency

India’s booming economy which is considered one of the fastest growing in the world demands better performance in transportation, especially when it comes to the case of gigantic sloth of Indian Railways (IR)! The behemoth public sector enterprise runs more than 18,000 trains daily and is comfortably one of the biggest rail networks in the world. However, it is yet to economise on the concept of modernisation and automation. In order to make the system more efficient, most of the nations across the world have privatised their mass transportation system. Undoubtedly, a better experience of travelling and transport can only be achieved by private participation and eventually it will also enhance the bottomline that has been looming at $48 billion as of 2009.

IR currently suffers from dearth of resources. Sadly, the infrastructure and manufacturing capacity available to IR is never enough to meet the increasing demand of locomotives and wagons! Nor does India stand a chance to meet the international safety standards, efficiencies and finesse of the railway services of Europe and North America! The service efficiency post-privatisation in aviation sector should be replicated by IR for better management. The main chasm between the promise and the delivery is created by the monopoly of IR. Undeniably, competition in Europe has enhanced railway services there in abound. In India, it is astonishing to note that even manufacturing of rolling stocks cannot be sourced through private sector and remains largely a monopoly of IR!

Even though, the private investment is largely blocked in Indian Railways, there are some recent news of limited private participation that presages the silver lining to the otherwise dissolute picture! A PPP model Rajdhani Express branded as 'Airtel Rajdhani Express' has started its operation between Bangalore and Delhi. Expectedly, the train features additional and better passenger amenities that include round-the-clock housekeeping operations. Apart, there is widespread private investment in most of the Metro operations (including Delhi & Mumbai metro) in the country that subsumes engine and coach manufacturing and infrastructure upgradation. The investment has come not only from domestic private companies but also from multinational corporations too.

Private participation is must for IR to eclipse the efficiencies of the Western countries. In West too, the private involvement was forced to be factored into the system as governments were unable to bear the cost! As a result, there was a stark improvement in consumer service, complimented by reduction in subsidy. In US, the system was deregulated and vertically integrated resulting in a paradigm shift to its efficiency in operations. It is a great exemplar of how even the developed countries couldn’t run the railways successfully and had to be finally privatised!

There is only one flip side to the privatisation of railways in India – and probably the most important one i.e., subsidised fares. In order to keep IR affordable for the lower strata of the society (post privatisation), the government must offer subsidies and tax incentives to companies that would provide low cost services, similar to low cost airlines, to these very pocket of population. This in the long run would not only make IR the largest but also the most efficient railway network in the World along with materialising the very objective and essence of Indian Railways — 'Lifeline to the Nation...'



  1. What sense he is telling that Indian railway to be privatized.

    We are living in developing nation not in developed.

    Think about India not Japan.

    How you people could say this.

    Very worst thing I ever heard.

  2. What innovative ideas he has !

    Blunder mistakes ....

    Bad bad bad .

  3. Shame on IIPM people's..

    From this Moment I won't buy your THE SUNDAY INDIAN .