Indian Railways need accountability: A world-class railway is not defined by record capital outlay or flagship trains. It is defined by safety outcomes, reliable timetables, clean stations, functioning toilets, and a governance model that punishes failure. India’s rail debate often begins with spending and ends with announcements. The harder question is whether the operating structure can convert spending into service.
It currently cannot. In 2025-26, the Railways’ operating ratio is estimated at 98.32%, implying that almost all operating revenue is absorbed by routine costs, leaving limited internal surplus for passenger amenities and asset renewal. The same budget estimates capital expenditure of ₹2.65 lakh crore, financed overwhelmingly by central budgetary support, which also limits operational autonomy. When a system depends on budget support for capex and consumes nearly all earnings on operations, world-class becomes a branding exercise, not an outcome.
The reform task is therefore institutional. The government should stop treating railways as a departmental monopoly, and make performance measurable, contracts enforceable, and safety technology non-negotiable.
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Capex headlines and passenger reality
The most visible contradiction is the coexistence of record capex with persistent overcrowding and poor on-board conditions. That disconnect is not primarily an engineering problem. It is a governance and incentives problem.
A state-run operator faces weak penalties for poor service quality. The feedback loop is political and episodic, not contractual and continuous. The cleanliness complaints data show the gap between railways’ claims and passenger experience. Coach cleanliness complaints rose from 24,758 in September 2025 to 36,673 in November 2025.
A world-class operation requires service-level obligations that are audited and penalised, not merely encouraged. This is the logic behind performance-based contracts in airports and urban transit systems. Railways has the scale to make such contracts commercially viable. What it lacks is the institutional habit of treating passengers as customers whose experience is a core output.
Make safety a legally enforceable standard
Safety reform needs a harder edge than “investment” and “missions”. The key is to define a minimum safety baseline and treat deviations as violations, not incidents.
Kavach, the home made Automatic Train Protection system, is central to that baseline. But the rollout pace and shifting timelines have become part of the problem. Indian Railways’ own materials show continuing technical and operational work streams for Kavach, including instructions and alterations issued as recently as December 2025.
Press reporting also indicates continued commissioning and sanctioning activity across routes and zones. The operational point is straightforward. A world-class railway does not treat collision avoidance as a discretionary upgrade. It treats it as a universal requirement.
The government should therefore do two things simultaneously.
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One, publish corridor-wise, date-certain milestones for ATP coverage on high-density routes, and bind project managers to those milestones with career consequences for slippage. Two, open parts of the safety programme to audited execution contracts with clear liability. Safety technology cannot be delivered at scale through dispersed departmental responsibility without enforceable accountability.
Indian Railways today acts as operator, infrastructure manager, procurement authority, and quasi-regulator. That concentration creates three pathologies.
It blurs financial signals, because cross-subsidies and internal transfers hide true service costs. The PRS analysis notes sustained losses in most passenger segments historically and refers to parliamentary recommendations for a comprehensive review of operating costs and fares. A world-class system must know which services are loss-making, why they are loss-making, and which subsidies are explicit policy choices rather than accounting artefacts.
It weakens procurement discipline, because the same organisation that awards contracts also controls the file movement, measurement books, and bill clearances. The corruption cases in the reference note are not aberrations. The Central Bureau of Investigation’s April 2025 press release on a Northern Railway bribery case describes a trap, followed by searches that seized cash and valuables running into crores, indicating the incentives created by opaque work orders and clearances.
It dilutes enforcement, because the system audits itself. The CAG’s Compliance Audit Report No. 5 of 2025 documents multiple instances of non-realisation and weak enforcement, including a case of non-levy of shunting charges leading to non-realisation of ₹50.77 crore in East Central Railway.
A credible reform package would therefore move towards structural separation: an infrastructure manager responsible for track, signalling and stations; competing operators, public and private, responsible for services; and an independent rail regulator that sets safety and service benchmarks and enforces them.
Possibilities of private participation
Private participation should be deployed where outputs are observable and penalties can be imposed. Three areas fit that test.
Station operations and redevelopment. The government already projects station redevelopment at scale under the Amrit Bharat Station Scheme, with official communication citing large numbers of stations under reconstruction and completions. Redevelopment, however, is not the same as station management. World-class stations require continuous operations standards: cleaning, lighting, toilets, waiting areas, and crowd control. These are services suited to concession contracts with daily KPIs and audit trails.
Defined passenger corridors. NITI Aayog notes Indian Railways’ foray into PPP for private participation in running passenger trains, with a targeted investment plan. The value of PPP here is not private capital alone. It is performance pressure: punctuality, cleanliness, staffing, and customer service can be made contractual obligations, with liquidated damages and termination clauses.
Freight and logistics. Rail’s stagnant freight share has become a macroeconomic cost because it pushes freight to roads, increasing logistics costs. The quickest route to world-class is not more passenger branding. It is raising reliability in freight operations, expanding terminal capacity, and running time-tabled freight on key industrial corridors. Private logistics players will invest if terminals and services are offered under transparent concession frameworks.
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Fund raising should follow credibility
The financial question is often framed as “where will the money come from”. In practice, long-term money follows governance quality.
Today, capex is heavily financed through budgetary support. Meanwhile, the system is preparing for higher wage obligations linked to the next pay revision cycle, and media reporting indicates cost-cutting measures being explored to absorb that burden. That reality constrains the ability to self-finance better passenger facilities.
There are four credible funding levers, but each depends on reforms that improve trust.
First, asset monetisation through long-term leases, not one-off sales. Railways’ land, airspace rights, and station-area development potential can generate recurring income if concessions are transparent and competitively bid. This is not “selling family silver”. It is pricing public assets properly.
Second, ring-fenced passenger facility funds linked to measurable KPIs such as water availability, cleanliness, and efficient on-board housekeeping should be funded through service contracts where payments are tied to passenger-rated outcomes and independent audits. The recent jump in Rail Madad cleanliness complaints is exactly the kind of signal that should trigger contractual penalties and targeted investment.
Third, expand PPP where risk allocation is credible. PPPAC has already considered rail PPP projects, indicating an institutional path for scaling such models. The key is to avoid vague “partnerships” and insist on contracts with enforceable service standards.
Fourth, reduce leakage before raising fares. The audit evidence on revenue non-realisation and the investigative evidence on procurement corruption together indicate that improving enforcement and procurement integrity can unlock resources equivalent to a major funding line. The political economy is also simpler. Taxpayers accept higher spending when they believe it becomes outcomes.
Can failure be penalised in real time?
The clearest difference between world-class railways and departmental railways is not technology. It is consequences.
A modern rail system has hard safety baselines, audited operations, transparent accounts, and management that can be removed for persistent underperformance. India already has the ingredients: high capex, indigenous safety technology, station redevelopment programmes, and a large passenger base. What it lacks is a structure that converts these inputs into outputs through incentives and enforceable responsibility.
Until that structure changes, world-class will remain a marketing phrase attached to islands of excellence, surrounded by a sea of mediocrity.