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COVID-19 impact | Railways privatisation may get a shot in the arm

Railways has proven to be a key contributor in India's response to COVID-19 crisis. Freight and parcel trains have been transporting essential commodities and other items when other modes of transport have come to a halt.

April 30, 2020 / 03:45 PM IST
Representative image

Representative image


Infrastructure sector has been deeply affected due to the COVID-19 crisis. Despite the debilitating impact of the pandemic on the economy, Railways may see continuity in investment despite the economic slowdown, according to an expert.


Investment in railways, especially through the private route, was considered an important area as seen in the National Infrastructure Pipeline (NIP), which included planned investment of Rs 13 lakh crore towards railway infrastructure.

"The NIP also foresees up to 30 per cent of the 750 stations privatised and involvement of the private sector in rolling stock operations. The government has set an overall target of 40 per cent modal share of railways in freight operations," said Sameer Bhatnagar, Partner – Transport and Logistics, KPMG India.

Aimed at improving efficiency of the national transporter through involvement of private organisations, Indian railways aims to transport up to 30 per cent of net cargo volumes and 500 passenger trains by 2025 by private players.

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According to Bhatnagar, Railways has proven to be a key contributor in India's response to COVID-19 crisis. Freight and parcel trains have been transporting essential commodities and other items when other modes of transport have come to a halt. Thus, it appears imminent that this sector would be in the spotlight going ahead.


However, this would require policy support, financial support, innovative funding and other reforms to enable spending.


The Union Cabinet in March approved a Memorandum of Understanding (MoU) signed between Railway Ministry with Germany's DB Engineering and Consulting GMBH for technological cooperation in the railway sector.

The government has also stated earlier that there is a proposal to outsource commercial and on board services of a few trains and to permit private players to induct modern rakes to run trains on select routes to provide improved service delivery to passengers.

While India appears to have better economic outlook for growth than other countries, investors are expected to be cautious about privatisation after the crisis, said Bhatnagar.


However, investors with deep sector expertise, sufficient capital and long term focus could bid lower but more reasonably and comparably between peers, offering more long term sustainability. As bids are expected to be lower, this may indicate better returns for investors.

As passenger trains may take more time to return to normalcy, track infrastucture and coaches may have less occupancy. This would provide a window of opportunity for maintenance, upgradation and expediting various railway works.

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COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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Pramiti Lonkar
first published: Apr 30, 2020 03:33 pm

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