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The railways should be largely nationalized with private operators allowed but with no subsidy from government. Most Railways can't be truly privatized as businesses because they don't make any profit. They are not a proper business.
They loose money which means they need to be given subsidy by government. Railways stopped making money in mid/late 1900s when Cars and buses started to take much of their business. Remember most railways in the past made their profits from freight not passenger trains but freight has declined hugely.
Instead of privatising it, some immediate and long-term concerns are also needed to be addressed. Immediate concerns are-decline in freight earning by due to low demand from core industrial sector viz.electricity , mining, cement ,fertilizers,oil etc and operating target ratio is likely to increase ,in wake of implementation of 7th Pay Commission. Long term concerns are years of under investment in new routes capacity addition leading to negligible increase in rail routes , over-congestion , delays in passenger and freight movements etc..
We can and we totally should! Indian railways is one of the biggest transport services in the world and one of the biggest employers as well. But despite the huge demand of its services, it is bogged down by severe cash crunch with operating ratio now reaching 92%, poor hygiene, pathetic safety record and extremely slow speed of passenger and freight traffic. Though politicization is one of the biggest causes of this problem, but monopoly and lack of accountability is only magnifying the problem.The accounting method used by railways is completely against best accounting practices and it makes accountability and transparency completely absent. There is no way to know which route makes profit, which division is loss making etc and hence we can't take appropriate decisions. Hence we should move to more prudent accounting system to usher in more transparency and accountability.
Indian Railway is facing a big problem of low profit and doesn’t have sufficient income to financé the required investments. It needs to focus on network expansion, reducing freight charges and delays , increase speed and modernise railways. All this requires money. The current system of railway has kept low passenger tariffs and high freight charges and also accountability is low. Indian railways need to become more competitive by restructuring itself . It needs to compete with other modes of transport like roads , rails and air. It needs to outsource some of non-core activities like school , hospitals and must focus more upon core business activity. Facilities for passengers should be improved at a competitive price and freight charges must be made low so as to attract more traffic. PPP models of investment need to be promoted in railways. Corporatisation of railways can also help in making it more competetive
On the better accountability part, government needs to decentralise many decision making authority .Greater accountability and transparency can help prevent wastage and misuse of resources. For example focus needs to be on better store and spares planning and cost cutting initiatives. This activities should be properly monitored and accounted for. Better accountability will also help timely implementation of projects and can solve many other problems