Interim Rail budget

Road map to privatisation of railways further unveiled

Presenting the interim rail budget for 2014-2015 to the Lok Sabha, Rail minister Mallikarjun Kharge said "I firmly believe that Indian Railways is primarily a commercial organization and it must operate in a financially self-sustaining manner. Major segments of its business - freight as well as passenger - should be market driven….” He added that "inadequacy of financial resources is a key constraint to Railways following the desired path."

This is a naked attempt to justify that the freight and passenger fares will be set in such a way as to ensure maximum profits. The development of new infrastructure henceforth will be mainly "market driven", that is driven by the greed of the private monopoly investors for maximum and assured returns on their investment.

The minister argued for attracting private investment in rail infrastructure through "Public Private Partnership" (PPP). The Rail minister announced that PPP projects related to rolling stock manufacturing units, modernisation of railway stations, multi-functional complexes, logistics parks, private freight terminal, freight train operations, liberalised wagon investment schemes and Dedicated Freight Corridors are in the pipeline.

Contracting out civil construction work on two Dedicated Freight Corridors, the Eastern Corridor linking Delhi and Kolkota and the Western Corridor linking Delhi and Mumbai has begun. The Eastern corridor will be mainly for transport of coal and steel, while the Western Corridor will be mainly transporting containers. These corridors are being designed to ensure that the freight trains can carry loaded trucks which can roll on and roll off at various points on the route.

He announced that the Government of India is considering opening up the railways for Foreign Direct Investment (FDI) to create "world class rail infrastructure".

The Rail Land Development Authority has been handing over the prime land of railways near major stations to private parties in the name of "Land Development".

The Rail Minister announced that High Speed Corridor was being set up between Ahmedabad and Mumbai apart from semi high speed projects on existing routes such as between Agra and Delhi, and Chandigarh and Delhi. These projects would be executed in collaboration with other countries such as Japan.

What does this course of development reveal? It reveals that just as in the case of the airlines sector, the massive railway industry has been divided into two parts. What the government of India considers the "core" part of the railways is the running of trains on tracks. The "non-core" part is being declared to be the coach and wagon factories, the locomotive factories, the maintenance workshops, other rolling stock manufacturing units, railway stations, multi-functional complexes, logistics parks, private freight terminals, freight train operations, the Dedicated Freight Corridors, etc. Private capitalists, Indian and foreign, will have assured and maximum returns for their investments in the Indian railways in any of these areas. Maintenance work of the trains and tracks and signaling system has already been privatised to a large extant. Only the running of passenger trains, the currently "loss making portion" of the railways, would remain part of the "core" responsibility of the railways. It stands to reason that over period of time, the workforce of the railways will also be divided between those working for the Indian railways directly, and those working for the different PPP Projects. This has already happened with the corporitasation of the railways. Thus the Konkan Railways, the Metros, the IRCTC, have been set up as separate corporations set up with the aim of privatisation, intensifying the exploitation of rail workers, and dividing them.

Beginning December, the railways has started implementing a new plan to loot the travelling public on new trains. This is the so called "dynamically flexible" fare. This fare is over and above the tatkal fare and it will be dictated by "demand and supply". That is, the manner in which the airlines industry manipulates fares to maximise profits is being replicated in the railways. The minister has announced that on select high traffic routes, this plan will now be implemented. This is a clear indication that the railways will use the shortage of seats and even create a shortage of seats, to charge more from the traveling public for the very same services. Over a period of time, the existing trains on these routes will be dispensed with, or their fares also converted into the "dynamically flexible" variety.

A Rail Tariff Authority has been set up to advise the Government on fixing of fares and freight. The railway minister has openly stated that this is to gradually bring down "cross subsidization" between different segments. That is, the aim is to end the so called subsidy on passenger fares. This is a replication of the government's policy regarding petrol and diesel pricing.

The railway minister also revealed a new facet of the railways in his speech. This is that development of railways in Karnataka, Jharkhand, Maharashtra, Andhra Pradesh, and Haryana are now being carried out through a cost sharing agreement with the respective state governments. This means that increasingly, those states which have the capacity to finance railway projects will be favoured, and those unable to do so, discriminated against.


The interim railway budget was passed without opposition in parliament. This means that the ruling class as a whole, and all their political parties, are in agreement on the roadmap ahead for the railways. This is a continuation and further development of the road map already pursued by the government over the past several years. All sectors of the Indian railways have been opened up to private capital, Indian and foreign. The infrastructure of the railways will be developed in the main only in those regions and sectors which Indian and foreign capital find assured maximum profits. In the name of efficiency and profitability, the work load on rail workers, especially the operational staff such as locomen, guards and so on will greatly increase, safety will be given a go by, and passenger and freight fares will be continuously increased.

There is need for the working class to vigorously oppose the privatisation of the railways. It is in the interests of the rail workers to thoroughly expose the anti-working class anti people course of railway privatisation, and fight to reverse it.


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Defeat Privatisation    Konkan Railways    IRCTC    Foreign Direct Investment (FDI)    Public Private Partnership (PPP)    Indian Railways    Mar 1-15 2014    Political-Economy    Privatisation   


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