Privatization in Railways

In this article we will discuss Privatization in Railways (Key Points)

In this article, we will discuss Privatization in Railways (Key Points). So, let’s get started.


  • Under this at least 151 modern trains will be introduced and 109 pairs of routes will be planned out for private train operations.
  • Train sets have to be brought by private operators and maintained by them.
  • Fares in private trains will be competitive and prices on other modes of transport like airlines, buses have to be kept in mind while fixing the fares
  • Private participation in passenger train operations will only be 5% of the total operations of Railways. 95% of trains will still be run by Indian Railways.
  • The project will bring private sector investment of about Rs. 30,000 crore.


  • To develop India’s railway infrastructure to provide travel services to all its passengers.
  • According to the 2019-20 data, the Railways ferried 8.4 billion (840 crore) passengers in 2019-20, about five crore passengers could not be accommodated, meaning their wait-listed tickets were dropped.
  • During the busy seasons/summer season nearly 13.3% passengers were not able to get confirmed reservations.
  • Induction of modern technology and reduction in transit time and the demand-supply deficit in train tickets.


  • Confirmed tickets and faster trains for passengers.
  • Trains would run faster and would be safer and provide more facilities.
  • Reduction in maintenance cost of train coaches.
  • The train coaches now required maintenance after they ran 4,000 km, but modern coaches would need maintenance after every 40,000 km or once or twice in 30 days.
  • Reduction in railways loss. Currently, the railways makes losses in passenger services.
  • Provide revenue to railways for future operations.
  • The private entity will pay the Railways fixed haulage charges, energy charges as per actual consumption and a share in gross revenue determined through the bidding process.
  • RFQ had been issued under the Make in India policy. So the coaches would have to be manufactured in India.
  • This will create jobs and utilisation of local components in manufacturing.

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