Essay On Privatization Of Indian Railways
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Introduction (Essay On Privatization Of Indian Railways UPSC)
From 1st July 2020, Railway Ministry started a formal process to allow private companies to the trains on 109 routes.
Indian Railway released a request for qualification (RFQ) for a private company to operate 151 trains on these 109 routes. these trains will constitute only 5% of the trains operated by railway.
The bidder offering the maximum share of revenue will get the contract to run such trains for 35 years. The aim of this initiative is to introduce “modern technologies” and “world-class services” for passengers.
NITI Aayog CEO Amitabh Kant recently said about the experience of privatizing the airport and said that it can be improved by handing over the trains to private companies.
On this basis, he also suggested creating an Empowered Group of Secretary for the privatization of trains.
Ministry of Railways has constituted a committee to privatize 50 railway stations and 150 trains. The committee consists of the CEO of NITI Aayog, the Chairman of the Railway Board, the Secretary of the Department of Economic Affairs, the Secretary of the Ministry of Housing and Urban, and the Financial Commissioner of Railways.
The NITI Aayog is emphasizing a scheme in which overall development of the area around the stations will be done by attracting private investment.
Actually, privatization here means that the necessary resources such as tracks, stations, employees, etc. that operate the railways will remain with the railways and private companies will do the work of increasing the convenience of passengers and ticketing.
Cause Of Privatization Of Indian Railways
- Indian Railways comes in government undertakings that are incurring losses due to continuous economic losses. The main reason for this is that the government does not have an accurate assessment of profit and loss in railways.
- Then the Indian Railways has also failed to keep pace with the modernization of its infrastructure and services. Railways are unable to provide convenience to customers on aspects like ticketing, catering, maintenance, and ticket checking, etc.
- Even at the technical level, railways have not been able to achieve high standards of quality of services and this is the reason why reports of accidents keep coming up from time to time. Apart from this, the time management of trains is a big challenge before the Indian Railways.
- In 2014, the Railway Board formed the Vivek Debroy Committee to raise resources for major railway projects and to restructure the Railway Board. This committee submitted its report in the year 2015 and talked about the privatization of railway’s coaches and engines. The committee also recommended the creation of a separate company for railway infrastructure, hence it is believed that the committee’s recommendations are also behind this initiative of the government.
Pros of Privatization of Indian Railway
- The purpose of the government to make the railways private is to get the Railways out of the vicious cycle of losses.
- For decades, the image of railways has become a loss-making undertaking, so the challenge with the railways is how to make the railways profitable. After handing over the tasks like ticketing and maintenance to private companies, the loss of railways can end.
- There is also an argument in favor of privatization that this will lead to better infrastructure and better facilities for the passengers. The most complaint to the passengers from the railway is that the quality of services provided does not match the payment made by the passengers. It is also true that now the railways have increased fares, but the work has not been done to provide facilities to the passengers. In such a situation, it is expected that with the coming of private companies in the railways, better management will be possible and this problem will be eradicated easily.
- Apart from this, the frequency of accidents in railways is also a big problem, many studies have revealed that the main reason for train accidents in the country is lack of maintenance. If we have to stop these accidents, then the private company will have to allow entry into this sector.
- So far, the Railway Board has a monopoly in the railways, but if the railway is privatized, the monopoly in the railways will be eliminated and a competitive environment will be created. This will not only provide better facilities to the customers, but it will also pave the way to bring profits to the railways.
Cons of Privatization of the Indian Railway
- Railways are considered the lifeline of India. There is hardly anyone who is untouched by the railways. Millions of people in the country are connected to it. Obviously, millions of people will be directly affected by any decision of the government.
- If private companies will partner up to the level of recruitment, there is also the possibility of current employees being discharged.
- The biggest advantage of the ownership of railways by the Government of India is that it provides nationwide connectivity irrespective of profit but due to the privatization of railways will not be possible to do so.
- The main objective of private companies is to earn a profit. And the area they will not benefit from, they will stop serving there.
- There is also a lack of accountability in private companies due to their behavior being unpredictable. In such a situation, such an experiment in an important area like Railways will be like taking a risk.
Privatization of the Indian Railway is Good Or Bad?
Railways are always surrounded by so many challenges. Whether it is the safety of passengers or due to the loss.
Privatization has both positive and negative sides. Privatization of railways is an ambitious goal and its mixed experience has been seen across the world.
Therefore, there is a need to be very careful in this initiative. The privatization of British Railways has been highly controversial.
Opponents of privatization argue that there is no benefit from privatization as the fare for traveling is high and there is considerable dissatisfaction among the passengers.
Therefore, there is a plan to nationalize the railway in Britain by snatching it from private hands. Although the privatization of railways in Japan has been very effective, not only the cost has decreased but the services have also improved.
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Conclusion (Essay On Privatization Of Indian Railways UPSC)
Railway Board chairman V.K Yadav has dismissed any speculation that it would lead to job cuts in Railway or the poor getting hits by this.
Equipped with resources and decades of experience, the inefficiency of the government remains a concern. Therefore, there is doubt that private companies will be able to benefit the Railways.
It is true that after privatization the number of passengers will increase and travel will become easier but all this will be possible only on the heavy rail fares, which will affect India’s economy in a big way.
Therefore, it is also important that before taking this big step, there should be a wide public discussion.
What will be the nature of privatization of railways in India and what will be its effects is a matter of the future, so it is necessary to adopt a balanced approach and take all aspects into consideration.
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