Its step-by-step privatisation must be stopped.
It must stay as a public enterprise for public service.
Speech delivered by Shri Girish, Deputy Convenor, All India Forum Against Privatisation (AIFAP) and Joint Secretary, Kamgar Ekta Committee (KEC) at the ‘All India Conference on Privatisation in Electricity and Other Sectors’, held at New Delhi on 15 April 2025
Indian Railways is the largest public sector enterprise of the country with annual revenue of Rs. 2.7 lakh crore and employing 12 lakh permanent employees and 4-8 lakh contract workers. Nobody knows the exact number of contract workers it employs. Yet, many of us have an idea about how privatization is being carried out in the IR. Whether UPA or NDA government, it has been going on step by step.
The process started in 2001 when the Rakesh Mohan Committee, recommended that Indian Railways should only operate in the ‘core’ activity of goods and passenger transport. It recommended that all ‘non-core’ activities can and must be outsourced or corporatised.
So, outsourcing was carried out for cleaning of railway stations, trains, food catering and bed roll supply, maintenance of air conditioning and so on. Also, production of locomotives, coaches and wagons, maintenance of telecommunication network and IT systems were also outsourced, as also the activities of running schools, colleges and hospitals for railway employees.
Many activities were separated out from the IR and corporatised – IRCTC, Concor, IRFC, Railtel, RITES, IRCON. Many new projects are now carried out under separate corporations – Konkan Railway, MRVCL, RVNL, DFC, HSRC. Starting with Delhi Metro, all metro railways are outside the Indian Railways and separate corporations. So now there are a dozen rail corporations besides half a dozen metro rail corporations – the highest number in any sector.
In 2020, the government decided to corporatise all the railways production units – units producing locomotives and coaches. It had to be deferred due to the strong opposition of rail workers. In 2023, the government wanted to hand over entire facilities at some of these units to private players to produce Vande Bharat coaches. This again was stopped by the united opposition of workers. So, the attempts of privatisation of existing rail assets continue in different forms from time to time.
The process of privatising these corporations has already begun. Shares of seven rail public sector enterprises have already been listed and their shares sold through the stock market. This shows that the real aim behind ‘corporatization’ is nothing but privatisation!
After handing over “non-core” functions to private players, the “core” functions of the railways were the next target for privatisation! The first step was taken in 2006 with the privatisation of goods transport. Nearly two-third of the revenue comes from goods transport. Government formed the Dedicated Freight Corridors Corporation (DFC) for rapid movement of goods. Right now, two corridors are under construction – one to connect Haryana to Maharashtra and the second between Punjab and West Bengal. The government has already announced its intentions to privatise these corridors. When fully operational, the DFC will deprive Indian Railways of a major share of its revenue and profits, shifting them into private pockets.
The next target was the privatisation of passenger traffic! In October 2013, the High Speed Rail Corporation (HSRC) was formed.
In 2015, as per the Bibek Debroy Committee’s recommendations, the railway budget was eliminated. This Committee recommended further major steps towards almost complete privatisation of Indian Railways. These recommendations also faced strong opposition and were put on hold.
KEC has been actively involved in opposing all these attempts of privatisation.
Another recommendation of the Bibek Debroy Committee was private development and operation of railway stations. 400 stations have been identified. Habibganj railway station in Bhopal is the country’s first private railway station, developed on the public private partnership (PPP) model.
In November 2014, the government opened up 17 key areas of railways for 100% foreign direct investment (FDI). These include high-speed train projects, the manufacture of diesel and electric engines, coaches and wagons, operating dedicated freight lines and suburban corridor projects.
In 2019, two Tejas train routes – Mumbai-Ahmedabad and Delhi-Lucknow were privatised and handed over to IRCTC for running.
Bharat Gaurav Tourist Trains, connecting various pilgrimage centres are now operated by private players, including IRCTC.
Railways is going ahead with monetization of its assets in a big way – Eastern and Western Freight corridors, as already mentioned; railway stations redevelopment – stations will be run by private operators like airports; railway land parcels, colonies and stadiums. They are being leased for 50 to 99 years.
To prepare for privatisation, the permanent workforce has steadily been reduced from 17 to 12 lakh while the number of goods and passenger trains have significantly been increased. More and more contract workers are being used. There are nearly 3 lakh vacancies, including nearly one lakh in safety categories but railway is refusing to fill them up. The workload and stress on existing employees have tremendously gone up affecting their health and family life. Such high stress levels and fatigue of operating staff is jeopardizing the safety of passengers as well.
Considering the direction in which the Indian Railways is moving, in a few years most of the profitable operations will be out of it and private. It will be left with loss making but socially necessary operations like passenger trains connecting rural and far-flung areas of the country, local train services, etc. Then we will be told that the government cannot afford such heavy losses so it must be privatised. This is what has already happened with Air India.
It is time for us all to stand up and stop it. Railways is an essential service in our country like electricity. It is the only affordable means of transport. It has been built with lakhs of crore of public money and hard work of lakhs of workers. It must stay as a public enterprise for public service.