INDIAN RAILWAYS AND ECONOMIC CHANGE

 Evolution Of Indian Railways

The origin of Indian railways was primarily done to facilitate the commercial interest of the British. Indian railways, the largest rail network in Asia and the world’s second largest under one management are also credited with having a multi gauge and multi traction system. The Indian Railways have been a great integrating force for more than 150 years. Indian Railways is known to be the largest railway network in Asia.

History of Indian railway:

The introduction of a rail system, transformed the whole history of India. This innovative plan was first proposed in 1832; however no auxiliary actions were taken for over a decade. In the year 1844, private entrepreneurs were allowed to launch a rail system by Lord Hardinge, who was the Governor-General of India. By the year 1845, two companies were formed and the East India Company was requested to support them in the matter.

The credit from the UK investors led to the hasty construction of a rail system over the next few years. On 22nd Dec’ 1851, the first train came on the track to carry the construction material at Rorkee in India. With a passage of one and a half years, the first passenger train service was introduced between Bori Bunder, Bombay and Thana on the providential date 16th Apr’ 1853. This rail track covered a distance of 34 km (21 miles).On the occasion of India’s Independence in 1947, the maximum share of the railways went under the terrain of Pakistan.  The existing rail networks were forfeited for zones in 1951 and 6 zones were formed in 1952. In 1985, the diesel and electric locomotives took the place of steam locomotives. In 1995, the whole railway reservation system was rationalized with computerization.

 Development of Indian Railways — Three Phases

 Initial Phase(1853-1880) 

The year 1853 was of great importance in the history of India. On 16 April 1853 the first passenger train was introduced between Bombay and Thane covering a distance of 34 kilometers formally heralding the birth of railways in India. Robert Mint Land Breton was responsible for the expansion of railways. By 1880 the network had route mileage of about 14500 kilometers mostly radiating from major ports like Bombay and Calcutta.

Second Phase(1880-1915) 

The second phase saw the introduction of some competition among the major lines in north India i.e. Delhi and Bombay, Punjab and Karachi. With the completion of these lines as well as the main lines serving Calcutta there was a struggle to gain control of shipments for the export trade because Karachi and Bombay had very poor facilities. Calcutta was much farther from Europe but it was able to compete because it held a monopoly on coal and could force up its price and consequently the costs of operation of other lines.All India average prices of charges for freight declined to 50% between 1881 and 1916 due to competition between the northern lines. This was further declined to 84% between 1881 and 1919

Third Phase(1916-1947)

In this period government acted to prevent the further falling of rates by establishing a central clearing house to foster cooperation and reduce competition, key lines were permitted and encouraged to form mergers. In 1886 there was amalgamation of Delhi railways with Punjab, the Indus valley and the Sind Sagar railways.

The expansion of branch lines which the government of India promoted also reduced competition. By 1916, through mergers growth of branch lines and agreement between the firms they began to stabilize.Company practiced price discrimination in order to maximize profit. Block rates were instituted which consisted of premiums charged to shippers who started their goods on one line and later had them transferred to another. This encouraged the use of a single line. Companies charged lower rates to and from ports than for comparable inland distances. These all things had critical effects on the economy.

 Indian Railways and Its Effect on Indian Economy

Railways were the most important infrastructure development in India between 1850 & 1947. They inter-connected all dimensions of Indian society. In terms of the economy, railways played a major role in integrating markets and increasing trade. Domestic -international economic trends shaped the pace of development of railway. Indian railways not only contributed towards economic development of Indian economy but brought about price stability and relief from famine damages among many Indian States. Another major economic change that was largely debated by economists with the introduction of Indian railways was the concept of ‘social-saving’. 

Contributing to Modern Market Economy

Prior to the introduction of railways transportation except in the Indus and Ganges valleys and in the coastal regions was costly undependable and difficult.  It provided rapid, reliable and cost-effective bulk transportation to the energy sector, to move coal from the coal fields to power plants and petroleum products from refineries to consumption centers. It linked places, enabling large-scale, rapid and low-cost movement of people across the length and breadth of the country. In the process, the Indian Railways became a symbol of national integration and a strategic instrument for enhancing trade and market integration.

 Contributing to Economic development

The Indian Railways contributed to India’s economic development and accounted for about one per cent of the GNP. Not only did it become the backbone of freight needs of the core sector. It also accounted for six per cent of the total employment in the organized sector directly and an additional 2.5 per cent indirectly through its dependent organizations. The Indian Railways, with nearly 63,000 route kilometers fulfilled the country’s transport needs, particularly, in respect of long-distance passenger , goods traffic. Today, freight trains carry nearly 1.2 million tons of originating goods and 7,500 passenger trains carry nearly 12 million passengers .


 

 

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