The Indian railways have a rich 165-year-old history built on miles and miles of tracks dependent on a multi gauge system from 1871. In 1991 the government announced a transition to this gauge system; however, it remains incomplete. 72 Years down the line, with railways gaining global attention and growing rivalry among nations pursuing aggressively the expansion of their rail networks while competing against rising domestic road rivalry and budgetary airlines, especially in India In the current economy the multi-gage scheme remains obsolete. From the point of view of operational viability, a multi-gage scheme not only impedes smooth travel between regions, but also places tremendous burden on the railways from the point of view of maintenance expenditure and also deprives regions of a holistic development of the rail network.
In our country Railways have always been the life lines of the nation , from providing people a means of affordable , comfortable and quick communication to even the remotest parts of the country to being the largest provider of employment in the country , Railways has indeed been a backbone , Indian Railways aspires to add 1.5% to the country’s GDP by building infrastructure to support 40% modal freight share of the economy.
Despite off all this Indian railways and its development has always taken a back seat in list of developments, its development has most often been sacrificed amidst political turmoil and war of power between various political parties as a result of which in today’s date Indian Railways is in poor condition with decreasing standards and increasing load day by day. Though various programs and plans have been charted out but none of them has been put quite to use uptil now.
Government of India on july 1st 2020 has announced the privatization plans of Indian railways as of now it has just asked private companies to submit their interests to run passenger trains getting private company to run the railways is crucial because it needs cash even the government of India is pretty tight on fiscal budget. Today amidst the global pandemic the economy has badly hit, companies are shut for over 2 months now. The idea of privatization is to attract investment so that it will bring more money. Privatisation also improves efficiency brings productivity as well as higher profitability .Although privatization has its advantages it also comes with certain disadvantages , however we trust our government to make a fair cost and benefit analysis before taking any steps. 
The privatization of Indian Railways is mainly based on demand and necessity . India is an attractive market with rapid urbanization , extensive landmass that needs railway connectivity also high population density . The nation debt of India for year 2019 with respect to its GDP is 69.4%. The main idea of an idea economic system is to grow the economy without increasing the national debt, for that existing infrastructure has to be looked upon and on that front the operational cost is much higher than the earnings , recently hike in price was also announced to collect more revenues that means Indian railways is facing revenue shortfall, and the operating cost has increased so in such scenario apart from hike in prices some other possibilities must also be explored and that is where private companies have advantage because they have capital . That is why government of India wants to offer private companies to operate passengers trains in return govern will receive fixed transportation charges, energy charges and a share in revenue.. So the whole point of privatization is that government wants to limit its function to monitoring and law making . Privatizing improves efficiency brings productivity as well as higher profitability . So this can be a stepping stone towards effective and significant change in Indian railways which was also much needed.
Author -Aeshna Raghuwanshi , Content Writer, Legal Eagle