India to allow private railways to set their own fares

India will allow private companies to set passenger fares once they start operating train services, a move aimed at luring investors, as Prime Minister Narendra Modi opens up one of the oldest networks in Asia.

“Private players have been given the freedom to fix fares in their own way,” V.K. Yadav, chairman of India’s Railway Board, told reporters on Thursday. But, “air-conditioned buses and planes also operate on those routes, and they have to keep that in mind before setting fares.”

Railway fares are politically sensitive in India, where trains carry as many passengers as Australia’s population every single day, and a chunk of the nation’s poor depend on the sprawling network for their transportation. While the network has been beset by decades of negligence and inefficient bureaucracy, Modi’s administration has invited private companies to participate in everything from modernizing stations to operating trains.