“Restructuring” of Indian Railways is a program to wreck a valuable public asset so as to fulfil monopoly

The projected finances of Indian Railways will be presented as part of the Union Budget on 1st February. The merger of the Rail Budget within the overall central government budget was carried out on the recommendation of a Committee headed by Bibek Debroy, a member of Niti Aayog. His report, titled “Dispensing with the Railway Budget”, suggested this change as part of the ‘restructuring’ of Indian Railways. What this ‘restructuring’ means is to convert Indian Railways into a set of profit-oriented businesses, run by private companies with no social responsibility. It means to wreck a public asset to fulfil the private interests of capitalist monopoly houses.

The ‘restructuring’ agenda was recently again stressed by the Railway Board Chairman a few days back while addressing monopoly capitalists, interested in participating in the privatization of railways. He announced, “We are running a purely commercial business in a sarkari way”, and assured them, “The Indian Railways is undertaking massive structural, cultural and process reforms to improve ease of doing business.”

Valuable Public Asset

Indian Railways is a lifeline of the country. It is the only reliable and affordable means of transport for crores of people in the cities and in the villages. Nearly 800 crore people travel on the Indian Railways every year. It provides the primary means of long distance travel for crores of workers, between their place of work and their home town or village. About 65,000 kilometers of rail routes connect different parts of our vast country. Nearly 17 lakh workers, including about 4 lakh on temporary contracts, toil to run this gigantic operation.

Nearly 110 crore tonnes of goods are transported on Indian rail lines every year, from food to cars. Wheat and rice produced in the granaries of Punjab and Haryana are moved by rail to all parts of the country. Bulk of the coal required to generate electricity is moved by rail. Any disruption in coal movement by rail creates a power crisis in the country. It is well known that rail is one of the most efficient means of transport, in terms of fuel consumption, minimizing pollution and speed of travel. It is the cheapest mode of transport for both people and goods.

Despite the vital role played by Indian Railways in the economy and life of the people, it is being wrecked in the name of restructuring. It is being wrecked through neglect and through piece by piece privatization by successive governments.

Following the Rakesh Mohan Committee Report of 1991, the Government of India began the privatization of so-called ‘non-core’ activities of the railways. These included catering, cleaning of railway stations, cleaning inside and washing outside of trains, running schools and colleges for the children of the railway workers, medical healthcare facilities for the railway workers, coach and wagon factories, locomotive factories, maintenance workshops, protection force for the safety of railway assets, IT system, and maintenance of telecommunications network, of air conditioning of A/C coaches of signalling system. By now all these activities have been privatized or contracted out.

The Railway Act states, “No private sector participation can be invited in the operations (core) of the trains”. However, both BJP and Congress led governments have been pursuing the goal of creating more space for private companies in the operation of trains. Former Railway Minister Prabhu clearly stated: “Eventually we have to get more private sector in the operations of the railways. Today, we are not able to get them because there is so much of congestion. If we create this capacity and availability, then private sector can come in and also give us a lot of money eventually without making any investment. We will own the network, they will operate the trains. We can make money out of it.”

The first step in privatization of rail passenger transport was taken by the Congress-led UPA Government in October 2013, with the launch of the High Speed Rail Corporation. The first step to privatize goods movement had already been taken in 2006 with the formation of the Dedicated Freight Corridors Corporation (DFC).

A major step towards large-scale privatization was taken by the BJP-led NDA Government in 2014 when it announced that 100% FDI will be allowed in 17 key areas of Indian Railways. Two locomotive manufacturing plants with 100% FDI are being built in Bihar, one by General Electric of USA and the other by Alstom of France.

Another method adopted for privatization is through formation of separate companies which has directly hurt rail workers. Many of the companies like Konkan Railway, Delhi Metro Rail Corporation, etc. are full-fledged rail companies providing passenger and freight services. In due course, all these companies are likely to be privatized. With the formation of these companies, workers also got transferred out of Indian Railways. Workers of these organizations are not allowed to join the existing federations of unions, thus weakening the unity of rail workers.

Thus, almost no part of Indian Railways activities is out of the purview of privatization. Indian Railways will be left with only the "loss making operations" while big monopolies will operate profitable sections of the railways.

Safety and Service Quality

A major area of concern for both workers and passengers is the privatization of track maintenance, which has seriously affected their safety.

About 3,00,000 trackmen constitute the largest section of employees of Indian Railways. They have traditionally been responsible for repair, maintenance and safety of tracks. After outsourcing of maintenance, private contractors employ trackmen who are not trained and paid extremely low wages, less than one-third the salary of a regular trackman.

The Kakodkar Committee, set up by the government, estimated that one lakh crore Rs. was required for immediate measures to make rail travel safe. The government announced the formation of Rashtriya Rail Sanraksha Kosh in the budget for 2017-18, with a miserly allocation of only Rs 5000 crore.

Privatization has been portrayed by the government as a program to achieve higher efficiency and better quality of service. The life experience of people, however, does not support this claim. The food for the passengers is prepared in such unhygienic conditions that the workers who are aware of this, prefer not to eat what is served by the Indian Railway Catering & Tourism Corporation (IRCTC). In the name of efficiency and profitability, the workload on rail workers has increased to unbearable levels, at the cost of their wellbeing and safety as well as the safety of passengers.

Demands of Rail Workers

Rail workers have been demanding an immediate halt to all forms of privatization of Indian Railways. They have been opposing the decision to permit foreign ownership in rail activities. They are demanding that vacant posts be filled so as to ensure safety of both passengers and rail workers. They are demanding immediate allocation of the necessary funds for ensuring safe travel.

Rail workers have repeatedly drawn attention to the fact that privatization and over-stressing of rail infrastructure and workers have led to a spurt in rail accidents. Their demands and memorandums have been repeatedly ignored by successive governments led by the BJP and the Congress Party.


The demands of rail workers deserve full and unconditional support of all the working people of the country. The so-called restructuring program of the government is going to hurt both rail users and rail workers.

Indian Railways has been built with public funds. It is a valuable asset that belongs to the people. It must be used for public good. The measures being taken to hand it over to private profiteers must be staunchly and unitedly opposed and defeated.


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Feb 1-15 2018    Struggle for Rights    Rights     2018   

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