Privatization of the Railways in India

BEST OF BOTH WORLDS

The railways in India are a very popular and an indispensable mode of transportation. It has connected India with highly diversified geographical terrain and infinite number of scattered towns and villages like no other mode of transportation. But it is beleaguered with low efficiency and high operational ratio year after year. Now under the management of the Railway ministry, it is in urgent need of better management. Privatization could be the answer.

After the disastrous economic condition of India in 1991, privatization has been the knight in shining armor for the Indian economy saving India from bankruptcy. Privatization has proven to be effective in improving efficiencies and raising the quality of both products and services. Privatization seems to be the concomitant answer to the inefficiency of the railways.

But railways are crucial to Indian transportation transporting over 9 billion passengers annually. It almost connects every nook and corner of the country to the rest of the India. Local trains play a key role in Mumbai, the commercial capital of India. Will it be in the best interests of the country to hand over such a crucial sector in the hands of a private owner?

Both alternatives have their set of advantages and disadvantages neither of which can be ignored. So railways should go with both options. Railways can be partly owned privately and partly by the government. Bringing a private player will improve the efficiency of railways and reduce the operational expenses and the railways will become a source of revenue for the government without handing over a crucial sector like railways in private hands. On the passenger front too, they will enjoy better services and the luxury of punctuality. It will be a win-win situation for all- the government, the private company and the passengers.

Given the circumstances it would be best for railways to be partly owned by the government and partly by a private company.