Privatisation of Railway: How genuine is the necessity?



India accounts for the world's fourth-largest railway network. The nationalisation of the Railways was completed in 1951. Ever since the railways have been one of the prominent economic boosters in the country, and also the employer of one of the largest workforces.

In times of liberalisation, there have been significant discussions for the privatisation of the Railways with goals being set for March 2024 to allow the private entities in obtaining and securing stakes and ownership of the railways. However, the concerns of the conscious citizen revolve around the question: Is privatisation of railways necessary?

The department of railways has been the legacy of the British rule in India and has been a major component of the Indian economy ever since its nationalisation. Although the railway is under the command of the Government of India, various arguments have been placed by the Prime Minister of India along with his Council of Ministers regarding the need for the privatisation of railways for its sustainability.

Taking upon the legacy of the former Prime Minister, Atal Bihari Vajpayee and his accomplishments in the Ministry of Railways, the present government has announced the process for the privatisation of approximately 160 trains as well as around 105 origin-destination stations at the initial stage. Many of the key industrial joints such as the Tata Group, Adani Group as well as the Norwegian Cruise Line have gained an early interest in securing the stocks, with the transition being planned to begin from the year 2024.

Privatisation of railways is argued as a notable decision for sustainability and profit generation that is centred around the citizens, who will act as the direct beneficiaries of this fundamental change. Nevertheless, the central control over the railways’ department has ensured a nationwide availability of services, however, it does not curtail the scope for improvement.

Over the years, the railway network of the country has been left unregulated and has proven inefficient in terms of sanitation, cleanliness, theft, etc. The sanitation at a majority of the stations has been unattended leading to a filthy state of washrooms, some of which are not even in a state of being accessible to the commuters. Furthermore, due to the vast network of the railway tracks, a large portion of the tracks have been left unattended which has greatly affected the durability of these tracks, which often leads to fatal railway accidents.

Lack of examination and inspection of the railway staff post-employment have amounted to a rise in dishonest practices and incompetency in the discharge of duties. There have been various incidents of negligence from the railways cooking staff and the quality of food being served in the trains.

The most common scenario while travelling on a local train is the rampant rise in pickpocketers, who often indulge in stealing items such as wallets, handbags, jewellery, mobile phones, etc. from passengers. The security of the passengers in Indian Railways has been questioned from time to time, yet these malpractices continue to exist due to the incapability of the railway staff to ensure proper supervision inside the trains as well as on the platforms.

Crowd mismanagement is the crucial element in the stimulation of the inefficiency as the stations are not adequately equipped with the infrastructure to maintain the rising population of passengers.

One of the reasons for the privatisation is the failure of the generation of internal revenue due to cross-subsidisation. In simpler terms, the income generated through the traffic has been divided to compensate for the shortfalls in the generation of revenue which results in limited availability of resources for the development of freight infrastructure.

Critics of the privatisation of Indian Railways have posted noteworthy arguments in defence against the government's move. They advocate the repercussions of privatisation in the light of the prior privatisation of Indian Airways which has blocked out India’s government entity ‘Air India’ because of the prodigious competition of private airlines. Air India Airlines have not been able to survive significantly in the Air Industry due to the availability of the infrastructure of the private entities.

They further criticise the accountability of the railways in case of privatisation, as much of the private entities have a higher reach that prevents them from being held accountable in an instant and proves to be cumbersome and lethargic process.

The different approaches in the management of railways will cause disruptions and improper implications of a centralised policy aimed at citizen empowerment. The fact that one of the world’s largest railway networks, in the world’s largest democracy, is open to private multinational giants is going to result in the reduction of revenue generation greatly impacting the economy.

The government, by way of tactical discussions, has responded to the critics by providing an insight into the expectations of such a change.

Focusing on the forthcomings of the decision, the government has promised the establishment of a better infrastructure which would subsequently result in the improvement of services delivered to the citizens. The availability of infrastructure will only result in the betterment of the quality of the services as the private entities will have an establishment to make improvements on a central stage than creating diffused establishments, different from one another, thereby eliminating confusion.

Privatisation of railway operations requires the creation of a newly bound institutional framework that would ensure a monopoly of government agents along with the presence of private service providers.

In the era of technological advancements, private entities with a more dynamic approach would result in technological innovations of the railways and digitisation for the easement of services. The profit-generation scheme through privatisation would encourage competition among the different private entities. This would result in a ‘Development Race’ which would put these entities under constant pressure to improve at a sustainable pace.

The citizens, irrespective of the concerns of both sides of the coin, have adopted a subtle approach to determine if privatisation is really necessary. They advocate the approach of corporations, wherein they have suggested a multi-managerial agent take control of such a crucial institution, rather than throwing it entirely to private enterprises.

They strongly support a larger chunk of government ownership, more than the private ownership to ensure a citizen-friendly environment, in the light of the German model of Deutsche Bahn, wherein the government has control of the majority of the shares in the railways while providing enough space for private entities to function at the same time.

Way forward to the government's policy, the privatisation deems fit to be introduced to strengthen the institution to reimburse for the social costs that have been inflicted upon the passengers’ comfort and ensure the welfare of the people.

With much consideration, privatisation has been successful in key areas of IT development in India, wherein the Government itself has not been a major representative, rather the private enterprises who have led the transformation to make India self-reliant.

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