Question :For Modernization of railways privatization is the need of the hour. But we cannot do it carelessly. Critically evaluate.
The Indian Railways is among the world‘s largest rail networks. The Government of India has focused on investing on railway infrastructure by making investor-friendly policies. It has moved quickly to enable Foreign Direct Investment (FDI) in railways to improve infrastructure for freight and high-speed trains
Privatization of railways is need of the hour because
- Aging railway infrastructure- the infrastructure need more capital which should involve private players
- Safety concerns – large no of accidents and deaths associated is causing railways fall in revenue and profit
- Efficiency of organization- Indian railway is one of the worlds largest employers. The efficiency of organization is often questioned which will be addressed by the privatization of organization
- Improvement of services-Indian railways is in serious efforts to improve services into world class which needs private involvement necessary
- Corruption and mismanagement- there are serious allegations of mismanagement often accused on the railway staff which can be prevented from privatization; unpalatable food unhygienic coaches etc.
- Politicization of railways- there are allegations of political usage of railway routes ,zones ,new trains.this issues can be addressed through privatization;issues about Andhra Pradesh
But we have to exercise caution in doing so
- Protests from employees- employees won’t be accommodating the idea of privatization of organization
- Protests from political circle- sudden privatization of one of the oldest organization in country will necessarily attract political ire
- Social role –railways has social responsibility to play like distribution of food grains and carrier of India’s general public
- Strategic role-railways acts as critical infrastructure for military and other governmental uses which will be upset by careless privatization ; siliguri corridor
- Effect on economy-research and market report cites 27 % of freight movement through rail in india. Careless privatization will have its effect on economy if market competition is not ensured.
So privatization of railways must be carefully executed keeping all the above matters in check. The following measures as recommended by Bibek Debroy committee will help
- Separation of freight and passenger movement in commercial routes
- Privatization of services in the railways
- A separate track holding company which will lease out space which will be a railway private enterprise
- Train running also should be privatized