Economy

KEY POINTS

Importance of Railways

·        Links places, enabling large-scale, rapid and low-cost movement of people across the length and breadth of the country.

·        Links agricultural production centres with distant markets.

·        Connects industrial production centres with markets and with sources of raw materials and facilitates industrial development.

·        Provides rapid, reliable and cost-effective bulk transportation to the energy sector.

·        Indian Railways has become a symbol of national integration and a strategic instrument for enhancing our defence preparedness.

Disadvantages of Privatisation

·        Race to profit degrades public interest.

·        Steep increase in pricing affects the poor & marginalised.

·        Increase in the cost of goods, affects the economy.

·        Become a symbol of upper class.

·        Less profitable routes will be neglected.

·        Freight trains will be preferred because of its high profit instead of passenger trains.

·        Enhance unhealthy competition, as the ultimate objective is to earn.   

·        Affects national security during war, as most of the defence shifting of manpower as well as equipments is through railways.

Solutions

·        Bringing in Public Private Partnership (PPP) model.

·        Confine private activities only to sanitation and catering, while retaining the operation of trains with the Public sector.

·        Privatize the peripheral activities of Indian railways such as running schools, hospitals and police forces.

·        This helps in greater resource allocation to its core function of running trains.