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Professor Raghuram told me that Railways should only bother about itself and leave the rest to the Government.

In that case why should railways antagonize its cash cow (freight) to please the dogs (passenger traffic)? If railways are really to bother about themselves alone then classic business approach would suggest that we liquidate the dogs and nurture the cash cow. Should we then stop passenger trains and run exclusively freight?

We know that as a government organization, our competitiveness gets severely circumscribed. There is no escape from it. Therefore if we want railways to act as an isolated business unit, the first logical step is to take it out of government hands. There cannot be a business argument for keeping railways with the government. The only justification for keeping railways in the government hands comes from a supra-railway perspective: As a government organization railways are not constrained by their isolated bottom line. Lot of new line projects are financially loss making to railways in terms of traffic. Yet they may have substantial positive impact on the economy of the region. Should we finance such projects or not? In my view, we must. If we want Indian economy to grow at 8% per year, then we perforce have to grow at at least at that rate regardless of the fact whether it is profitable for us to grow at that rate or not. If we do not grow at the rate of economy growth, then we become a bottleneck for the rest of the economy. In the long run, no economy can outgrow the rate of growth of its transport infrastructure. The investment in transport infrastructure is imperative. The only question is which mode of transport we should invest in. In my opinion, as a country, we should invest in railways. And I am not saying this as a railway officer. I am saying this as a private citizen that it is the investment in railway's transport infrastructure that will give the country the most bang for the buck.

A country of a billion people cannot build its economy on road transport. Chinese realized it a decade back. Till 1990, IR had better per person route-km density than Chinese Railways. In last one decade, Chinese Railways made massive investments in their infrastructure and left IR far far behind. Not because they wanted to blow up money. But because they realized that their was no way for their national economy to grow at 10% per year if their railway infrastructure continued to grow at 2% per year. Only a minuscule portion of Chinese Railway's investment would be justified on purely railways consideration.

IR has a still crucial role in Indian economy. If we want to eliminate poverty from India, we need a rail head in every nook and corner of this country; half of them will never be justified on basis of an isolated business perspective. When we loose that integrated national perspective then we loose the only edge of being in government organization. In fact we get the worst of both the worlds: we run our business in non-business like fashion with all the shortcomings of being in government hands, yet we fail to take advantage of the only positive aspect of being in the government i.e. luxury of a supra-railway perspective. Talking of IR as a stand alone business unit isolated from the integrated national economy is suicidal (not for the IR, but for the rest of the economy). India does not have that luxury.