SHOULD INDIAN RAILWAYS BE PRIVATIZED?

FDI plays an important role in developing countries such as India where every sector is developing and the government sometimes faces the shortage of investments. In such situations FDI plays an important role. Indian railways are such an example which has shortage of funds. Our Indian Railways need robust investment which can be met only if private investors are attracted. Indian railways are the ONE single entity that touches lives of all Indians, some more regularly than others. The Indian Railways is known for its turnaround story going from a near bankruptcy in 2001 to strong behemoth in 2007. But now to the losses are increasing every year and operating ratio is also very high when compared the previous few years. Passenger trains are always running in loss which is subsidized by freight trains. Not only this, India loses as much as $45 billion a year due to poor logistics infrastructure. This wastage could be cut by half and fuel needs could be reduced by 15-20 percent if the country fixes its transport infrastructure and moves more goods by rail. Only 33% of the total electricity route is electrified. Transport by electricity is much more energy efficient than by diesel. Vision 2020 plans to have more than 50% route electrified by 2020. This paper looks into the problems faced by the Indian Railways and what can be the solution of these problems confronted by Indian Railways. The objectives of this research are: do we need privatization of Indian railways? And why do we need it? For this secondary data is used and that data has been collected from different sources which is analyzed and interpreted properly.