Privatisation of Indian Railway


Privatisation of Indian Railway

There is much news in the air that Indian railway is going to be privatised. But Railway Minister Piyush Goyal said, “Indian government is not going to privatise Indian Railway or premium trains i.e. Rajdhani & Shtabadi Express. But they said that government is working to impalement PPP (Public Private Partnership) in various sector of Indian Railway.


In a written answer in Lok Sabha Railway Minister Piyush Goyal said, “No specific passenger train has been identified to be run by private payers so far.

However, Sources have said that railway has found New Delhi-Lucknow Tejas Express, but no official announcement has me made yet.


But Indian Railways is moving fast towards for privatization of railway stations on Public Private Partnership (PPP) projects. The stations will be allocated to the private firms through auction. The firms getting tender will be allowed to modernise the stations. As part of the modernisation of stations, Railways will allow developers to build malls, cinema halls, hotels and specialty hospitals within the station premises.


The redevelopment of the stations is occurring through different phases. In the first phase, the responsibility of redevelopment had been given to Indian Railway Station Development Corporation (IRSDC), a joint venture Company of Ircon International Limited and Rail Land Development Authority.

Earlier, in 2014 India allowed 100% FDI in railways infrastructure through automatic route. Through this foreign companies have established two rail loco factories in Bihar with an investment of Rs 3500 crore. According to the railway official, various investors from Japan and South Korea have also expressed in the station redevelopment projects and the government has queued up 400 stations for redevelopment.


The private participation in public sector indicates the implementation Bibek Debroy committee report. The pro-privatisation wing is substantiating their point on the basis of it. The report favored private participation which is said to be the key to increase the efficiency of the system. The committee has also looked at the railway restructuring experiences from multiple countries, including Japan, the United Kingdom, Germany, Sweden, Australia, and the USA, as examples.


Indian Railways runs more than 12,000 trains which carry both 2.3 crore (aprox) people and 3 million tons of goods every day. The majority of the Indian populations, who cannot afford private vehicles, rely on the public transportation system. Railways are the most viable mode of transport for this section of the society.


Pros and cons of privatization


·        Improved Infrastructure.

·        World class service.

·        Lesser Accidents.



·        High fares.

·        Less popular/profitable routes may be eliminated.

·        Accountability (Government & private company may blame each-other on any fault or in unwanted situation).

·        It will also affect the job in railway.



Final Words

Railways operation should be in the hands of government but infrastructure and maintenance should be with private sector. But that too is an issue, government & private company may blame each-other on any fault or in unwanted situation. So government should regulate this and provide a path like overlapping departments should come under a common contractor. This will enhance our journey to next level.

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Created on Jul 17th 2019 09:37. Viewed 243 times.


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