- COLUMN, economy, governance, politics

Dangers of hasty privatization of railways

Dr P. Pullarao

Governments  in India made a mess of public sector enterprises and then want to sell them off. Naturally, the public companies are sold at cheap prices. Those who buy them usually eye the real estate and machinery value of the  assets. They became very rich after buying government companies.

Usually, there are some corrupt motives too.

Indian railways :

  1. The British started Indian railways  in 1853. India was the most valuable and  largest colony of the British. The rivals of England were France and Portugal   always wanted to expand in India .  Britain was very worried  that at any time France  might try to attack India. Moreover, Britan now controlled the entire Indian sub-continent  and even Burma fully. The British realized that the railways were a great transport method to rush troops and British officers all over the country in a short time . Either you travel

There is a great need for improvement.  We need  change in the  railways but not termination.

ed in trains or rode horses. Trains were fast and could move large numbers of people.  Even before railways started taking root in Europe, India got railways.

Everyday, Indian railways  move millions of passengers . Railways employ nearly 14 lakh people. It is the cheapest form of comfortable  travel. But the Indian railways are now a tempting target  of private business.

The recent actions and announcement of government and in particular the new Railway Minister  on privatization of the railways has caused  anxiety in the  country. The great Brtiish poet Alexander Pope said in 1711 “Fools rush in where  angels fear to tread  “. Millions use  the railways everyday. It is  not a commercial  enterprise and can never become one.

Many countries  have tried to make railways  a privatized operation. It has never worked.  Rather than focus on privatization as a panacea for the failures or ills of the railways , deep pondering and the future of India must be considered.

  1. Britain has privatized railways during the regime of Prime Minister Margaret  Thatcher 30 years ago. The British railways were the best in the world. The trains were clean and punctual and railway stations were like hotels. The railway time tables were books of art. . Now we increasingly hear voices that the British railways will be fully or partly re- nationalized  or parts of  it brought under government control.
  2. Management of the  railways at the ministerial level either requires a world-class executive or a Minister  with great peoples skills and mass contact . Those railway Ministers who have been successful in India like late Madhu Dandavate  and  T.A. Pai had some such virtues.  My contention is that irreversible decisions like privatization of railways should not be done in a hasty manner by any Minister.

The act of privatization usually is cloaked as great progressive  activity. But it is not. It is the easiest of solutions  with no gains. A scholar brought to my attention what the  Bhagvad Gita said “  There is action in in-action and in-action in action “. Privatization  is “ Inaction in action “.

  1. While railways can perform better, it is not the  fault of the railways  family that it is not running better. Government of the day  has full control  and it is their responsibility  to run the  railways.  Not having the ability  to run the railways should not make it become a  victim of privatization.
  2. Whether  railways are making a big profit or not, they are the foundation  for a great sphere of economic activity. Every aspect of Indian life is touched by the railways. If the government wants  to buttress our defense at the borders, do you think that a privatized railway would care  about it ? How will government make strategic plans with a privatized railway? Government should carefully consider whether  tinkering with a  great on-going institution should  be contemplated.
  3. Our neighbor China is investing great amounts in its  railways. There is economic sense to it. China is tying up with Nepal and other countries to link railways. India is being left out.  If government goes headlong on privatization ,then surely we will be cutting back on  the entire development and safety of India .
  4. The government had merged the historic railway budget with the general budget . This was supposed to bring great changes . Thus far, no gains have been seen. The only consequence is that the prestige of the railway minister and the Railway Board has declined . The railway minister is less  accountable.  This decision as an example of “economic diktat” and made  in  haste  and has had no desirable  results. I think there is a  good case  for de-merging the railway budget and having the traditional Stand-Alone Railway budget .


Dr P. Pulla Rao is a Socio-political and Economic analyst

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