Consider the following statements about the initial development of railways in India by the British :
1. Private financial investors for railways would get land free from the British Government in India.
2. The investors would get a return of 5 percent on their capital from the government if they ran at a loss or secured inadequate profit.
3. The railways would be jointly managed with the government.
How many of the above statements is/are correct?
1
2
3
None
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC CDS-1 – 2024
Statement 2 is correct. The same guarantee system assured the private companies a guaranteed return (usually 5%) on their invested capital, regardless of whether the railway lines made a profit or incurred losses.
Statement 3 is incorrect. In the initial phase under the guarantee system, the railways were primarily managed by the private companies. While the government exercised some supervisory control over aspects like route selection and standards, it was not a system of joint management in the sense of equal participation in day-to-day operations. The government later moved towards direct state management and construction of railways.