The aspiration for development and technological advancement among Indians comes with a significant price. This cost, which must be shouldered by the Indian people, involves repaying a loan in Dollars, a currency that is skyrocketing at an unprecedented rate.
The inauguration of the Mumbai-Ahmedabad Bullet Train project marks a new era of technological progress for Indian Railways, the world’s largest rail network. Despite some setbacks in recent years, the trains in India have been making steady, albeit slow, progress.
The idea of a high-speed train was first proposed around 2006-07. However, due to the enormous infrastructure and operational costs, the project was not finalized. The government at the time did not proceed with it.
Under the Bharatiya Janta Party administration, Prime Minister Narendra Modi approved the project, 
not just to fulfil a promise, but also with an eye on the 2019 general elections.
Modi has stated that the Rs. 88,000 crore loan promised by Japan for this Rs. 1,10,000 crore project should be considered virtually free. India is to repay this loan at an interest rate of 0.1% over a span of 50 years. Japan is providing 80% of the total project cost, with the remaining Rs. 20,000 crores to be provided by the Centre. This raises the question of why the route is Mumbai-Ahmedabad and not New Delhi, the nation’s capital. The answer may lie in the fact that Gujarat, the Prime Minister’s home state, is being courted.
The Institute of Management Ahmedabad (IIM-A) has conducted a detailed study on this project and has raised some concerns. The loan repayment will begin 15 years after the project becomes operational and will continue for 50 years. According to the IIM-A report, if the fare is Rs.1500 per person for 300 Kms, the train will need to carry 88,000 to 110,000 passengers daily, 15 years post-operation, to ensure timely repayment of the loan and interest. This would require 100 round trips between Mumbai and Ahmedabad. The success of this project remains to be seen.
The projected fare is Rs. 2782 per person for the 508 km distance between Mumbai and Ahmedabad, which is to be covered in 2.07 hours. In comparison, the current fares are Rs. 1855 (AC Sleeper class) for a train journey of 8 hrs 52 minutes and Rs. 1426 for a flight of 1 hour 15 minutes. The question arises as to how many Indians will be able to afford this high fare, which is more than the airfare.
Several factors need to be considered for this project, including cost escalation until loan repayment begins, the availability of passengers for this expensive train, and more. But who’s paying attention?
It’s important to note that Japan’s per capita income is $50,000 and India’s is $1,500. Are we in a position to compete with these developed nations? India will be in debt for 50 years for a project that, as of today, is predicted to fail, especially as the technology transfer is still unclear.