Arjun Soman

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Should you privatise Indian Railways??

Indian railways, one of the largest employer in the globe has been under Government stake over the last 65 years... there has not been any great improvement in the railways since then... Why cant the government privatise the Railway Industry so that it could lead to tremendous improvement of infrastructure in the country ??

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    Aug 21 2012: Personally, I would vote for more public control, and better funding of the existing public system. By public control, I mean less in the hands of bureaucrats, more in the hands of local citizens. Local citizens of small towns should be writing local bills to use existing government resources to make a beautiful new train station, if such a thing is possible.

    I'm a sucker for properly done public transportation though. I was born in New York, and the subways and trains are fantastic, but I lived most of my life in LA, and here, they are horrible. It's worth it to invest in the rails. I prefer public, but if you had a long list of investors with proper planning... Privatizing might not be horrible.
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    Aug 21 2012: I think privatising Indian Railways does have both pros and cons.
    Pros are:
    Improvement in infrastructure as you stated.Infrastructure of Indian railways and railway stations are so poor due to lack of hygienic conditions,lack of proper ambience,lack of proper resources etc.Privatising it can improve the situation since a private player will not minimize his value by not working on these conditions.
    Providing good facilities which may include food etc.
    Cons are:
    Increase in the value of travel:Private players may charge more than the government inorder to compensate all the expenses they encounter to provide the pros.This may not be much viable for all the sections of people to travel.
    Irregurality in variation of prising schemes:Private players can variate the prize when ever they want to and they may subject this to some kind of reasons which acts superficial to the common people.
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    Lejan .

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    Aug 20 2012: Privatisation of Indian railways would not guarantee the improvement of infrastructure.

    As private companies are usually focused on profit and short term ROI (return on investment) cycles, there is a given risk that the common good will get lost in the long run.

    Large private investments never come without certain intrests, which, at a certain point in time, may exclude many people from public transportation due to a rise in ticket prices.

    Worldwide different experiences have been made in privatising national railways.

    Japan Railways serves as a positive example in this field, whereas British Railways is often mentioned for its downsides. In 2008 New Zealand reversed its privatisation as the result didn't match the original intention.

    For India it may be helpful to learn from other nations and to balance pro and con's on its specific needs.
  • Aug 21 2012: It is now very common in India and very fashionable for younger generation & some vested interest both national & international , that anything private is good and anything in public sectors are breeding ground for inefficiency & corruption. Why not privatize Governments altogether and create laws as per the wishes of Satyam, Mobile Mafia, Coal Mafia etc, and Rockefeller, Morgan Stanley etc., so that it will be better to enable them to take away the resources as they like and use it for growth of their companies with board member payed not in billions but in trillions. So that the World will be better place for few chosen by these organisation. Scrap the present voting & election chose leaders and select leaders through internet, facebook & twiter. The voter is owner of email ID, which can be used to do anything they want. The performance of Govt. will be judged like in the share market. I am not able to write more. This kind of thoughts should be stopped now for God's sake. It is getting too far. No doubt free market has failed like socialism. No particular ism & system is panacea for all the ills of the society we are creating and living in. The governance is not a simple issue. Its the issue of right people in right places and how to achieve it through a process which has to be determined looking into all the pos and cons with inbuilt mechanism to change when the situation changes.
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    Aug 20 2012: No nation in the world needs railroads more than Canada does. When it is privatized the service from most smaller centres is discontinued. The people there still need the service and communities can no longer grow but that is irrelevant in the face of profit and loss statements. Be careful what you wish for.

    Here is a pasting from Wikipedia on this topic:

    In 1978 the government created Via Rail which took over all national passenger service in the country. In 1987 the National Transportation Act partially deregulated the railway industry in Canada and removed much of the red tape that railways experienced when attempting to abandon unprofitable lines; however, the NTA is now viewed as more of a failure in that railways used the legislation merely as a first-resort after "demarketing" a line, rather than a last-resort after trying to find a short line buyer. In November 1995 the federal government privatized CN, and in 1996, the government corrected the NTA 1987 shortfalls with the Canadian Transportation Act which more fully deregulates the railway industry.
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      Aug 21 2012: Canada like Australia is a poor candidate for privatised "public" transport. We both have smallish populations spread over vast areas. Here (and I assume there) we put up with our taxes being used to keep the trains and buses going because one day you might need them and there's little or no chance of them being profitable on thier own. The thing that might make it work in India is the population density. You don't often see empty trains in India, plus I think in its current state the Indian government probably has a lot of trouble collecting taxes to run such infrastructure
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        Aug 21 2012: Superb point, that I had not adequately considered. Thank you, Peter.
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    Aug 21 2012: Well, Could also give me some insights about the government repositioning the Indian railways as a international standard transport service? Is it possible??
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    Aug 21 2012: James,

    Why do you feel so? Could you point out some of the reasons ?
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      Aug 21 2012: Indian population is huge. The cost to privatize things on a mass scale is increasingly more difficult the more people are involved. However, if you only privatize for a select few who can afford that kind of luxury, then you're only increasing the wealth gap between rich and poor.

      If you publicize railways, then more work will be accomplished due to easy availability of that infrastructure to all people. It increases more opportunities to more people and increases the rate of development for India.
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    Aug 21 2012: Yes, I totally agree... Another area would be the revenue that government is able to generate from the Railway ministry is quite high. If privatised, the revenues from tax might not meet the government fund requirements.
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    Aug 20 2012: I think the opposite should be more true. Indian Railways should be publicized more than privatized.