Privatisation of Indian Railways.

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The Rail Budget which cleared foreign Direct Investment in railways has once more raised the privatization issue.  My position on this is clear. Indian Railways should not, repeat not, be privatized. Indian railways is the ONE single entity that touches lives of all Indians, some more regularly than others. It is therefore best placed to be a public good. This means that people cannot (should not) be excluded from accessing it. Privatisation would result in some degree of exclusion, primarily arising from

  1. ‘non profitable’ routes being discontinued
  2. fares being unaffordable to some.

Plus there is the question of accountability. Governments can be held to account in numerous ways; removing a non functioning government through parliamentary / election processes being an extreme example. It is relatively more difficult to hold private entities to account. The arguRailway budgetsment that privatization, foreign investment etc will infuse cash in the system is well taken. Surely that is not the only way to access cash? Avoiding ‘feel-good’ investments like bullet trains and using the resources to fund more basic and wide reaching projects is just one way that immediately comes to mind. Just have a look (alongside) at some of the investments that will touch lives of million of people living in and around Mumbai (these are estimates from the Railway ministry) and then compare it with the estimated spend of Rs. 60,000 crore on the bullet train between Mumbai and Ahmedabad. What makes more sense?

No doubt, some functions in the railways – catering, maintenance of coaches, sanitation at railway stations, ticketing can be privatized and indeed some of them have been over the last few years.

While I am no devotee of the commanding heights theory and do not believe that government should control everything, there are some services that the government should always provide – defense, law and order, foreign affairs, primary health services, primary education, roads, power just to name a few.

Oh yes – and the Indian Railways………….

Makarand