Indian Railways
India's government-owned railway network, historically operated by over 20 private companies before progressive nationalization starting in 1900 and accelerated in 1920.
Indian Railways is portrayed as unsafe, unclean, and of low quality, leading to public acceptance of issues like filthy platforms, poor train food, and frequent accidents, such as the July 10 derailing of the Kalka Mail. Post-1947 independence, frequent changes in railway ministers have failed to improve services due to its status as a government monopoly.
Historically, Indian Railways was operated by more than 20 private companies. The Great Indian Peninsula Railway Company was transferred to state ownership on July 1, 1900. A pivotal development occurred in 1920 when the East India Railway Committee, chaired by Sir William Acworth, recommended the nationalization of all remaining private railway companies, marking a major shift toward full government control.
Contemporary issues reflect characteristics of a government monopoly. The Controller and Auditor General (CAG) reported that of the ₹4,600 crore allocated for safety works from 2003 to 2008, more than 50 percent remained unspent. Over 86,108 vacancies in safety-category posts persisted unfilled. Additionally, the Research Design and Standards Organisation (RDSO) was behind schedule in developing technologies to mitigate risks to passengers and users.
The source contrasts this with economic theory, noting that railways are excludable and rivalrous, not fitting Paul Samuelson’s definition of public goods (non-rivalrous and non-excludable, like lighthouses or national defense), thus providing no economic justification for exclusive government production. It calls for privatization to introduce competition and creative destruction for improvement.