Emergic: Rajesh Jain's Blog

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Indian Railways

December 5th, 2003 · No Comments

Trains are one of my delights, especially in India. I don’t get to make too many journeys nowadays, though. I was still especially interested to read this report in the Economist. The article looks at how the Indian Railways, which celebrated its 150th anniversary in April, needs to be reformed.

Because of its history, its scale and its usefulness to so many political interests, Indian Railways presents a special challenge to reformers. The roots of that challenge lie in an addiction to vote-catching subsidies, a fear of the power of organised labour, a deep suspicion of privatisation, and a reluctance to lose the power to dispense political patronage.

Much of the disagreement is between economists looking at the railways as a business, and dedicated civil servants looking at what they still see as a public utility and social service. As one senior railway official, who believes he works for a healthy, growing railway, puts it, if you moved to a business model, Indian Railways would collapse. As with so much of the Indian public sector, re-invention will be late in arriving.

One of the good things that has happened is the online booking of tickets set up by a subsidiary, IRCTC. That offshoot has become the largest e-business in India.

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