Privatisation of public transport in India – the right move or not ?

Privatisation of public transport in India – the right move or not ?

Whether you agree or disagree with privatization, two things are obvious. First, taxpayers need to be asking more and better questions before handing over control of critical public assets like a highway, an airport, or a parking meter concession. And second, Uncle Sam is being played for a sucker.

People supporting this initiative (privatisation) have their own theories. According to them public transport services can be made cheaper and better by contracting out the right to operate them. But is it really true ? let us look at some facts.

Indian public transport sector especially Indian railways are the largest employer of jobs in the country  accounting for over 1.6 million employees. Privatising this sector would lead to a huge decrease in the number of employees as the main focus of the private sector would be to earn money unlikely the public sector which focuses mainly fulfilling the needs of the people, so their first aim would be to cut off jobs drastically. Apart from this, public sector employees have better job facilities than in private sector like job security, better work culture, comparatively less work load etc.

Although initially the fare price might decrease due to friendly competition between the private companies in order to attract customers but it is only a matter of time that prices would hike back up when one company will start making some grip over the market. And due you really think they will stop   there ? it will keep getting worse  and worse. In no time prices would hike to unimaginable extents again due to the money minded mentality of the private sector.

Not only this. What if one company gains too much control over the sector ? Privatisation can lead to monopoly of a single company or a single individual and the government wont be able to interfere in the sector. The private sector would implement whatever policies they want to and the worst part no one would be able to stop them. Also after privatisation customers voice wont be heard to that extent. To explain this let us take recent case of Haryana roadways strike in Haryana. Within a week all the demands were heard by the government. Their wishes might not be fulfilled instantly but the government has assured the bus drivers that their demands would be looked upon and the government would never do anything against the will of the majority. Can we expect this assurance from the private sector ? let us be honest. Who are we kidding ?

Apart from this the public transportation sector invests its savings back into the the public transport networks which help in the improvement of the infrastructure of this sector and that would not be the case after privatisation.

Most importantly, the tax revenue that the government earns from the transportation section forms the major part of the total tax revenue collection of the country. Railway alone contributes to over 2.3 lac crore rupees (2300000000000) to this revenue. Privatising this sector would break the back of the tax payers as the government would be forced to compensate this loss by increasing other taxes. Think about it for a moment – increasing tax prices combined with fare hikes.

Moreover if privatisation happens, most of the vehicle (train) parts that are currently being manufactured in India will be replaced by readymade foreign goods to cut the overall cost.

All these things that the media is showing in favour of privatisation may seem very fancy and realistic but in real life they don’t work. We need to look at the facts which clearly state that privatisation of public transport could lead to chaos in the whole country and if this happens it would be catastrophic for the Indian economy.