Railway’s Privatization: A Benefactory?

Railway’s Privatization: A Benefactory?


Indian railways have recently opened up private players in passenger services. Some think it is an excellent initiative, but others contradict it. But, without any doubt, there will be challenges ahead.

Railways Privatisation was the new first step that the Railway Ministry took. By inviting Request for Qualifications (RFQ) to the private practitioner to operate the passenger train services.

This privatization project allows at least 151 modern trains to be introduced on 109 pairs of routes. Train sets have to be brought by the private operators and will be maintained by them.

The Fares in private trains will be an ambitious task by keeping other modes of traveling like airlines and buses before setting fares.

The participation of the private practitioner will be a whole of 5%, and the rest of 95% will still be under the Indian Railways. This project is set keeping the private sector investment of about 30,000 crores.

Why Privatization of Railway is happening?

Developing India’s railway infrastructure to provide travel services to all its passengers is now a need. According to last year’s data, there were about 8.4 billion passengers who were ferried across the country. And about 5 Crore passenger’s wait-lists were dropped.

Also Read: Kotdwara Railway station, one of the oldest in the country

During the busy season for the railways that are around, the summers witnesses nearly 13.3% of their passengers who cannot get confirmed reservations.

Benefits from Privatization
  • Faster trains, which would be safer and provide more facilities along with confirmed tickets for passengers.
  • As time passes by, the train coaches now require maintenance after they run for about 4000 km. But, these new coaches will require maintenance after 40000 km or in other words once or twice in a month.

The private entity will pay the Railways fixed transport charges, energy charges as per actual consumption—also a share in gross revenue determined through the bidding process.

indian railway

RFQ had been issued under the Make in India policy. So the coaches would have to be manufactured in India. This will create jobs and the utilization of local components in manufacturing.

On the other side, there are questions about the fair prices of rail travel to increase and scare off job losses. This will majorly affect the marginalized communities (Scheduled Castes, Scheduled Tribes, and Other Backward Classes), who get reservation under the government jobs. Currently, there is no reservation in private sector employment.

Privatization in whole will require a new set of operational framework where the infrastructure will come under the Government’s monopoly.

It is essential to modernize the Indian Railway System keeping the measures to be taken to compensate the speeding cost to keep the railways better allocated and facilities upgraded from time to time.

Also Read: IRCTC declares its first annual result after listing into exchanges. Here’s a detailed insight into the monopoly business.

After a two-day-long discussion, Railway Minister Piyush Goyal responded that the Union Government has no plans to privatize the Railways now or in the future. As it is known to be the property of the country’s People, he raised this in the Rajya Sabha. However, there would be public-private partnerships.

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