GS PAPER-II DAILY NEWS ANALYSIS for UPSC CSE (courtesy:Insights and others)
Privatisation of the Railways
What to study?
For prelims and mains: privatisation of railways- pros and cons, Debroy committee recommendations.
Context: Government rules out privatisation of railways.
Recommendations by Bibek Debroy Committee:
The Bibek Debroy Committee, which was set up to suggest ways to mobilise resources for the Indian Railways and restructure the Railway Board, has favoured privatisation of rolling stock: wagons and coaches.
Improved Infrastructure – It will lead to better infrastructure which in turn would lead to improved amenities for travelers.
Balancing Quality of Service with High Fares – The move would foster competition and hence lead to overall betterment in the quality of services.
Lesser Accidents – Because private ownership is synonymous with better maintenance, supporters of privatisation feel that it will reduce the number of accidents, thus resulting in safe travel and higher monetary savings in the long run.
Coverage Limited to Lucrative Sectors – An advantage of Indian Railways being government- owned is that it provides nation-wide connectivity irrespective of profit. This would not be possible with privatisation since routes which are less popular will be eliminated, thus having a negative impact on connectivity. It will also render some parts of the country virtually inaccessible and omit them from the process of development.
Fares – Given that a private enterprise runs on profit, it is but natural to assume that the easiest way of accruing profits in Indian Railways would be to hike fares, thus rendering the service out of reach for lower income groups. This will defeat the entire purpose of the system which is meant to serve the entire population of the country irrespective of the level of income.
Accountability – Private companies are unpredictable in their dealings and do not share their governance secrets with the world at large. In such a scenario it would be difficult to pin the accountability on a particular entity, should there be a discrepancy.
Key recommendations made by Debroy committee:
Link increase in passenger fares to better passenger services
Create a separate company for railway infrastructure
Open access for any new operator who wishes to enter the market for operating trains
Separate suburban services and run them as joint ventures with state governments.
Private entry into running both freight and passenger trains in competition with Indian Railways