What is the Privatization Of Indian Railways: What are its Pros and Cons?

GS paper 2

Privatization Of Indian Railways

The Indian Railways is among the world’s 3rd largest rail networks. Rail network is also cost-effective and accessible to all part of society as being public service.

As, the private sector role in railways has been less in India, compared to sectors like ports, telecom, power, airports, and roads.

But recently the government has decided to liberalize the entrance or private operator in public transport as the railway sector is one of the few government-owned enterprises that’s incurring losses year-after-year.

Indian Railways hasn’t been able to keep pace with So, in this context’BIBEK DEBROY‘ committee had favorite privatization of railroad as these are the following


1) Improved Infrastructure

Niti Aayog’s strategy for NewIndia @75 envisages many targets in railway infrastructure such as increasing the rate of infrastructure creation, 100%electrification of broad gauge track by 2022-23.

So, privatization will lead to better infrastructure which in turn would lead to improved safety, decrease in travel time, etc

2) Improved Quality of Services

To fix issues like lack of punctuality, mismanagement in the kind of stinking washrooms, lack of water supply, and sanitation of programs, privatization will create competition and hence lead to overall betterment.

3) Tech Infusion

The privatization will also help in accommodating the most recent technology in railways coaches, security, and traveling experience. Thereby, it might help Indian Railways to become a world-class network.But, there are some concerns associated with the Privatization of Railways

1) Restricted Coverage

Routes that are less popular may be neglected in privatization, by way of example, regions with rugged terrain and low population density like Himalayan states and northeastern states.

2) Problems with cross Subsidization

Indian Railways have a tendency to cross-subsidies passengers this translates to below-cost pricing, which can make it hard for private players to compete.

3) Conflict of Interest

conflict of interest between the ministry of the railway and the private participant would undermine the fair contest between the government and private railway operations

4) Social Welfare problems

Indian Railways plays an avital role in the transportation of many final and intermediate goods, serves the whole population at the low-cost of transportation.

But privatization of the system inspired by profit-making will have an inflationary effect and thereby influence the common people.

Thus, need to step up towards some successful Measures for efficient and inclusive transportation services such as as

1) Sustainable Pricing: there’s a need to revisit the IndianRailways pricing model to make the passenger and freight segments sustainable.

2) The tariffs should be aggressive with the cost of road transportation.

Modernization of Railways:

There is a need to implement the recommendations of the Bibek Debroy committee.

Such as growth of Indian Railways manufacturing and other allied factors of development

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