By M.Y.Siddiqui
The Government is all set to privatise Indian Railways notwithstanding the Prime Minister Narendra Modi’s announcement to the contrary, while laying the foundation stone for expansion of Diesel Locomotive Works (DLW) at Varanasi on December 25, 2014. All railway unions’ representatives were detained before the Prime Minister’s function at the DLW in order to prevent them from protesting against the Government’s move to prrivatise the railways. Earlier, the Railway Minister Suresh Prabhu also ruled out any such move. He was allaying the fears of railway unions. But actions of the NDA Government so far signal that the Railways are marching towards privatisation.
The Centre has already announced 100 per cent Foreign Direct Investment (FDI) in Indian Railways in manufacturing of high capital intensive equipment, bullet trains, semi-high speed and high speed rail infrastructure besides curtailing/withdrawing various concessions including cross subsidization of passenger services from freight earnings. All these will undoubtedly lead to increased rail service costs, resulting in all round hike in freight and passenger fare, making rail travel and rail user services costlier to the people. The Government’s move to dilute the concept of social responsibility of Indian Railways and the hitherto held policy of welfare state in our rule of law based system of democratic governance are expected to reflect in the forthcoming railway budget 2014-15 in the last week of February 2015.
People have already witnessed how the policy of private participation in infrastructure of railways has not taken off. The much-touted Public Private Partnership (PPP) module has failed. There has been virtually no investment in this regard. Main reason being long gestation period between investment and fructification of that in the form of profits. Private sector’s sole objective is profit making in an investment with little gestation time. Hence, their wariness in investing in railways where depreciation is fast in the form of rusting and corrosion of rail infrastructure together with the rolling stock. Even the much-hyped policy of developing the railways in states with their participation with provision of land and other inputs has not fructified. A policy to privatise wagons in the form of ‘own your wagon scheme’ floated in 1993 with its different variables since then did not take off. Added to these, even privatisation of non-core services of railways like catering, cleanliness, some other passenger amenities and logistics did not work because of deficiencies in services and growing dissatisfaction of rail users.
Ever since globalization of Indian economy was set in motion in 1991, there has been demand from private sectors including multi-national corporations to invest in Indian Railways that include operations, without which there would not be returns on such investments. But the successive governments have been reticent in parting with operations, resulting in stunting private investments.
The policy of 100 per cent FDI in railways, shorn of operations on strategic considerations, Mittal Committee report on withdrawal/curtailment/rationalization of all concessions to various categories of people like sports awardees, gallantry awardees, physically challenged, people suffering from certain diseases, students, unemployed youth going for interviews, social workers, NGOs etc. including cross subsidization of passenger services are pointers to commercialization of Indian Railways intended to run it on business model by doing away with a fine balance between commercial proposition and socially responsible organization without making it formally the Indian Railways Corporation, as recommended by Rakesh Mohan Committee.
Mittal Committee on rationalization/withdrawal of various concessions, which are about Rs.5000 crore, together with various Taskforces appointed by the Government for making Indian Railways financially viable both through short term and long term measures are symptomatic of privatization. This will ultimately curtail employment avenues in the world’s largest single public entity, popularly known as Indian Railways behemoth, to make rail services to the nation costlier on business module, thus undermining it as a public welfare body. It is noteworthy, in our system of democratic governance, people are the sovereign masters. Government of the day has no business to take anti-people measures as it affects them the most. The Government has to be responsive to the people as other modes of transportation are costlier than railways!
