Corporatization of Indian Railways

The Government of India has denied consideration of any proposal to privatize Railways. Government would have valid and good reasons for this. There however, does not seem to be any convincing reason for running the railways departmentally. The telecommunications were earlier handled departmentally by Department of Posts and Telecommunications. Now the telecommunications operations are run by BSNL, a Government undertaking. The service is now much better than what it was, when it was handled departmentally. Similarly, railways should be run by a government undertaking. Railways have around 1.4 million officers and staff. The population of as many as about 50 countries in the world is less than 1.4 million. In such large operations, it is difficult to get the best out of the employees. Therefore, the operations should be handled, to start with by at least 10 corporates each with employee strength of about 140000, which itself is very high. These undertakings could raise resources by making profits and by borrowing from banks and the public. Hence forth, they should only be giving dividends to the government and should not seek any budgetary support for new lines or for any other purpose.

Additionally, like highways, railways should also get projects of new lines, doubling of lines etc by Build, Operate, Own and Transfer (BOOT) basi

As mentioned in the post “Indian railways and employment generation” (1.5.2009), India needs at least about 137000 km of new lines and this can be constructed fast by Corporatization of Railways and by allowing construction of rail lines by BOOT method.


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