Why private entities are being invited to run trains in India

The amount of proposed 50 lakh crore Rupees which is proposed to be invested in the sector is around one-third of the total GDP of the Nation. It is clearly visible that the government has many other things to do with its revenue and thus it wants private entities to make an investment in the Railways.

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Indian Railway Privatization
Indian Railway Privatization

The Indian government has recently identified 109 busy routes across the nation to start running 151 private trains for a period of 35 years. However, these all 151 trains will only constitute 5% of the total trains currently running under the vast network of Indian Railways.

The move comes after the government planning to invest around Rs 50 lakh crore Rupees in the rail projects up to year 2030. The proposed amount is around one-third of the total GDP of the country and it is obvious that government is not going to spend such huge part of GDP only for the development works of the Railways. When we go through the Union Budget of financial year 2019, only a part of it can be financed through government coffers, and public-private partnerships are needed for faster development of Rail networks within the country.

As the government can’t afford such a huge amount for railways, it is now finding out possibilities to bring investment from the private sector. The government is also giving free hand to private players on fare and operation related issues which make them more autonomous. The decision to allow private players to run passenger trains can be seen as a trial for further disinvestment of the Indian railways and moving towards complete privatisation of the sector.

The success of the 151 trains which are proposed to start running on the 109 busy routes will be a litmus test both for the government and the private players. This is the reason why the government is planning in such a manner that no hurdle comes before the private firms who are going to run the trains.

The things will change for India if the government and private players are successful in operating these set of trains. The government will further bring in private players on board in developing new stations and tracks if the things remain good for the private firms and if they are able to make desirable profits.

The government will allow them to run more trains once the trial phase is successful and if the things go well with the parties, Indian Railways will have more than half of its stakes in private hands by the year 2030 as per the reports and experts.

The impacts of the move can only be seen once the trains start operating. The dynamic fare system of the private trains can be a factor which will keep away the poors from its luxurious travel. This move however will benefit the business houses and busy people across the domains. It will further provide time saving world class travel services to businessmen and officials as well as other people for whom time has a greater importance than the commoners.

The move is, however, is seen by the experts as a move towards complete privatisation of the Railways. Whether it is going to be beneficial or harmful, only time can determine that issue. The government, however, remains reluctant on its move to bring changes across different domains of the existing system of public transport especially Railways.

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