LAL BAHADUR SASTRI

institute of management & Technology

Bareilly

PRESENTED BY
Vishal Patel
PGDM-First sem.
2021-22
 Content
01 Privatization of
Indian railway

tatio 02 Types of privatisation

n
izati 03 Reason of
privatization of IRO

04 Impact of privatisation
 Privatization

“The transfer of ownership , property or business

from the govt to the private sector is termed
privatization. the govt ceases to be the owner of the
entity or business.”
 History of privatisation in India
1. The privatisation process began in 1991-92 with the sale of minority stakes in
Some PSUs

2. In 1991 the primary objective of privatization in India were , Raise the

revenue in the market because the fiscal crunch was becoming a real
problem . Improve the profitability & efficiency of public enterprises.

3. The railway, in recent year , has been mulling ways of generating revenue
through different streams , including leasing out its vast pool of vacant
land and ,most importantly , opening doors for public private
partnership
 Types of privatization
However, there are six methods of methods of privatization.

1. PUBLIC SALE OF SHARES.

2. PUBLIC ACTION.

3. PUBLIC TENDER.

4. DIRECT NEGOTIATIONS.

5. TRANSFER OF CONTROL OF ENTERPRISE THAT WERE

6. CONTROLLED BY THE STATE OR BY MUNICIPALITIES

7. LEASE WITH A RIGHT TO PURCHASE

 Privatisation of Indian
railway
Ministry of railways has kick-started the process to allow
private players to operate certain trains on its network by
inviting request for qualifications (RFQ) for the operation
of passenger train service on over 100 routes with 150
modern trains. (high speed train -160km\hr)

Trains manufactured under make in India scheme (job

Generation)
How much portion are
privatised
Private participation in passenger train operations will
only be 5% of the total operations of railway.95% of
trains will still be run by Indian Railway.

The project will bring private sector

investment of about Rs 30,000 core.
Note –The Bibek Debroy
committee recommended that
the rail industry needs to be
liberalized by allowing the
entry of private operators to
provide services.

Bibek Debroy committee

 Reason behind
privatization
Low quality of service
Low quality
catering of service
and punctuality
catering and punctuality

Low internal
revenue

INCREASING NUMBER
INCREASING NUMBER
OF ACCIDENT
OF ACCIDENT

High operational ratio

Impact of privatization
Advantages Disadvantages