Privatisation of Railways

GS Paper 3

Topics Covered: Infrastructure- railways.

 

Context:

The employees union of the North Western Railway (NWR) protested recently against the privatisation of railways announced by Centre recently.

 

Rail Privatisation:

Objectives of privatisation:

1. To introduce modern technology rolling stock with reduced maintenance.
2. Reduced transit time.
3. Boost job creation.
4. Provide enhanced safety.
5. Provide world-class travel experience to passengers.
6. Reduce demand-supply deficit in the passenger transportation sector.

 

Pros:

1. Improved Infrastructure – It will lead to better infrastructure which in turn would lead to improved amenities for travellers.
2. Balancing Quality of Service with High Fares –  The move would foster competition and hence lead to overall betterment in the quality of services.
3. Lesser Accidents –  Because private ownership is synonymous with better maintenance, supporters of privatisation feel that it will reduce the number of accidents, thus resulting in safe travel and higher monetary savings in the long run.

 

Cons:

Coverage Limited to Lucrative Sectors – An advantage of Indian Railways being government- owned is that it provides nation-wide connectivity irrespective of profit. This would not be possible with privatisation since routes which are less popular will be eliminated, thus having a negative impact on connectivity.

Fares –  Given that a private enterprise runs on profit, it is but natural to assume that the easiest way of accruing profits in Indian Railways would be to hike fares, thus rendering the service out of reach for lower income groups. This will defeat the entire purpose of the system which is meant to serve the entire population of the country irrespective of the level of income.

Accountability –  Private companies are unpredictable in their dealings and do not share their governance secrets with the world at large. In such a scenario it would be difficult to pin the accountability on a particular entity, should there be a discrepancy.

 

Recent Decision of Ministry of Railways in this regard:

1. On July 1, 2020, the Ministry of Railways announced that 151 trains in 109 pairs of routes will be operated by private sectors. It comprises just 5% of the 2,800 Express and Mail services operated by Indian Railways.
2. Private trains will start operating tentatively in 2023 and in 12 clusters.
3. Private companies will be given the freedom to procure locomotives and trains from their source of choice.
4. Railways has invited Request for Qualifications proposals, for scrutiny of vendor capabilities, from those who can bring modern trains for operations on existing rail infrastructure.

 

Insta Curious:

Do you know about India’s first private train? Is it still in operation today? Reference: read this.

 

InstaLinks:

Prelims Link:

1. When were Railway and General budgets merged?
2. India’s first private train.
3. Bibrek Debroy Committee is related to?

Mains Link:

Discuss the significance of privatisation of railways and challenges involved therein.

Sources: the Hindu.