Privatisation of Railways

“Privatisation is presented as being the only alternative to an inefficient, corrupt state. In fact, it is not a choice at all… it is a mutually profitable business contract between the private company (preferably foreign) and the ruling elite of the Third World.” - Arundhati Roy. The term ‘privatisation’ is used when public sectors such as business, property or any operations owned by the government are transferred to the private sector. The definition of privatisation varies from context to context. It can mean transferring things that are public to private. It can also mean a certain thing, that was heavily regulated, is moved to less regulated form through the process of deregulation. Five main methods of privatisation are recognised, namely, Voucher privatisation (where vouchers that represent part ownership of a corporation are distributed to all the citizens of a state at a very low price or for free), Share issue privatisation (that shares the quantity of sale on the stock market), Privatisation from below (where new private businesses are started), Asset sale privatisation (where assets are disposed to a more strategic investor with the help of auction or similar methods) and management buyout or employee buyout (where shares are distributed to the employees or the management of an organisation for free or at a very low price). There are both advantages and disadvantages of privatisation. Researches have shown that privatisation has made markets more efficient and more goods and services can be provided. Without any government interference, it has the opportunity of being in free market competitions. This eventually leads to less corruption, low price level, improved quality of goods and many more. Being in the competition, a company will naturally try to meet with the customers demand by providing good products and great services. It will increase its performance and efficiency. Privatisation focuses more on economic goals rather than political ones. It is more secure and is devoid of any political influences.


According to Dernard Malamud, “If your train’s on the wrong track, every station you come to is the wrong station”. To provide good travel services to all its passengers, India’s railway infrastructure is in dire need for a change and that change, according to the government, is Privatisation. When the country’s assets are being sold one by one, the latest venture of the Modi government is the privatisation of Indian Railways. On 1st July 2020, the Railway Ministry announced that the private sector will invest Rs 30,000 crores on 151 trains to be operated in 109 pair of routes. The driver and the guard will be the only ones belonging to the railway employees and all the others will be from the private company. The private companies are given the freedom to acquire the trains and locomotives of their choice. They are also given the privilege to choose the fare rate that will be charged from the passengers. Just like private airlines, the people travelling in private trains will have to pay for preferred seats, extra baggage and other facilities. By April 2023, the private train operations will begin. Unfortunately, in a country like India, the media tends to flatter the present government instead of being neutral and the government always works in the interests of the corporate sectors neglecting the needs of common people. Opposing the idea of Railway Privatisation, D Raja, general secretary of Communist Party of India said, “The Railways is not the only sector Prime Minister Narendra Modi’s government is handing over to the corporates. The government has opened the floodgate for the private sector to take over sectors like coal mines, banks, defence, oil, insurance, electricity, telecom, space and atomic energy. Any private entity investing Rs 30,000 crore will expect a huge profit from its investment resulting in a huge increase in the ticket fare. Train, which is the common man’s transport, will go beyond his reach. The BJP government does not have any concern for the common people. The government decision will take away the dream of the Indian youth, including those who belong to the socially and economically downtrodden sections to get a railway job.”


The government has several arguments in favour of privatisation. According to the government, during the years 2018 - 19, only 16 percent of 8.85 crore passengers, who were in the waiting list, could be provided with reservations. So, privatisation is needed to increase and manage the capacity that peaks during the busy seasons. But the government is actually leaning towards gaining profit and not considering the needs of common people. 70 percent of the total seats are in AC coaches and the rest 30 percent is left for the sleeper coaches. The employees of private Tejas trains can be seen working for 18 hours a day for a salary of Rs 15000. Privatisation and glamour goes hand in hand which is not always possible for the railway employees. The fare charged per kilometre is unreasonable. Having 68.8 percent of the total population Below Poverty Line (BPL), privatisation in Indian Railways are becoming unacceptable to a majority of people. Binoy Viswam, Rajya Sabha MP from CPI has written a letter to the Prime Minister requesting him to take back the decision of making Indian Railways privatised. In his letter he stated that “there is no dispute that the Indian Railways is in need of greater investment and updating. However, as a vital public service that connects people of the country, its privatisation is not a solution. The government should increase spending in the railway sector and implement effective solutions that do not depend on the sale of national assets. The lives and livelihood of millions of employees of Railways depend on your action. I therefore urge you to withdraw the decision and invest in the improvement of the Railways without privatising it.” Any public transport system is meant for the common ordinary people who cannot afford to travel if it is privatised. Railways are the lifeline of India. Tracks are spread over 60000 kilometers that connect about 7500 stations carrying nearly 20 million people every day. Privatisation of it can set a step back in the Indian economy.


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Blog Post written by:
Oindrila Langal
Intern
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