Monopoly Of Indian Railways.pptx 673w2f

MARKET MARKET AND AND INDIAN INDIAN RAILWAYS RAILWAYS Presented By:Nidhi Sood (3057) Preetmahinder Kaur (3072) Parveen Kaur (3063) Sachin (3084) Shubhanjali(3092) Sunny Dev (3094)

Presented To:Miss Aditi Kalra

INTRODUCTION What

is a Market ??

Market refers to a place or locality where commodities can be bought or sold.

But in economics: Market Market

Mechanism Mechanism Or Process Or Process

Buyers and Buyers sellersand sellers

Direct Direct Competition Competition

‘Market’ does not refer to a place but it is a ‘mechanism’ by which buyers and sellers of a commodity are able to each other in Direct competition for economic exchange.

TYPES OF MARKET Market Perfect Competition

Monopolistic

Imperfect Competition

Oligopoly

Monopoly Duopoly

MONOPOLY 

Derived from two Greek words:

‘Monos’

‘Single’ meaning

‘Poles’ 

‘Seller’

Monopoly means existence of single producer or seller who produces or sells a product which has no close substitutes.

FEATURES OF MONOPOLY 

Single sellers and many Buyers- A monopoly firm may be owned by a person, a few numbers of partners or a t stock company.



No close substitutes- Monopoly can not exist when there is competition.



Closed entry-In a monopoly market there is strong barrier on the entry of new firms.



Price Marker- The seller controls the prices of that particular product or service and is the price maker.



Price Discrimination- Price discrimination refers to the practice of a seller of selling the same good at different prices to different buyers. Price discrimination is possible and profitable only when markets are imperfect.

MONOPOLY: EQUILIBRIUM

Revenue/Cost

X

P Pm

MC

AC

Qm

E= Equilibrium Point, where, MC=MR Pm= Price Qm: Pm> AC, :. Excess profits

e

MR

Demand

Firm = Market Short run losses are also possible Qm shows abnormal, supernormal profits

Y

PROFIT MAXIMIZATION UNDER MONOPOLY A

firm in the short run earns maximum profit when it meets the following conditions:* MR = MC and MC curve cuts MR from below. * Average Revenue is greater than Average Total Cost.

PROFIT MAXIMIZATION UNDER MONOPOLY Revenue/Cost

MC

P

ATC

AVC

Profit e

AR

O

Output

MR

MONOPOLY- THE INDIAN RAILWAYS  State owned railway company of India and has monopoly

on country's rail transport.

One of the largest and busiest rail network in the world, transporting over 6 billion engers and almost 750 million tones of freight annually. 

 World’s largest commercial or utility employer, with more

than 1.6 million employees.

 Railways was first introduced in 1853, the first enger

train between Bombay & Thana.

Railways grows in India with the encouragement of British

Government.

WHY IR IS CONSIDERED AS A Single seller (Government) MONOPOLY ??and many 

buyers.  No substitutes ‘NOT EVEN CLOSE  Closed entry  Price maker  Price Discrimination - Senior citizens - Students - Army officials, etc.

IMPACT OF GOVT. MONOPOLY ON IR Benefits

Hindrances

Stability of prices. Public benefited. Source of revenue for government. Price discrimination can be applied to earn profits or provide services to people. Economic differences can be reduced.

Poor level of services. No consumer sovereignty. Lack of competition & proper care leads to lower quality. No consumer choice. Hinders the economic growth.

BACKGROUND Production: INFORMATION Production:

-Manufactures -Manufactures most most of of its its Rolling Rolling Stock Stock and and heavy heavy engineering engineering components. components. -Production -Production units units are are managed managed directly directlyby byministers. ministers. -Each -Eachunit unitwas washeaded headedby byGM. GM.

-Operates -Operatesover over9000 9000trains trains&&over over 55billion billionannually annuallyacross acrossIndia. India. -Preferred -Preferredmode modeof oftransportation transportationin in most mostof ofthe thecountries. countries. -Overcrowding -Overcrowding.. -Ticket-less -Ticket-lessengers. engers.

engers: engers:

Services Services -Many -Manycities citieshave havededicated dedicated Suburban Suburban Rails: Rails:

-Carries -Carriesvariety varietyof ofgoods. goods. -Contributes -Contributesto to70% 70%of ofrevenues. revenues. -Majority -Majorityof ofearnings earningscomes comesfrom from carrying carryingbulk bulkgoods goodslike likecoal. coal.

Freight Freight ::

suburban suburbannetworks networkslike likeMumbai, Mumbai, Chennai,Delhi,Hyderabad,Pune Chennai,Delhi,Hyderabad,Pune ,etc. ,etc. -Only -OnlyMumbai,Pune Mumbai,Pune&&Hyderabad Hyderabad shares sharestrack trackwith withlong longdistance distance trains. trains. -Trains -Trainswere weremostly mostlyelectric electricmultiple multiple units. units.

IR AT PRESENT  World’s

3rd largest railway network.  Contribute up to 2% to the gross domestic product (GDP).  Approximately 65,000 km of rail tracks and over 7,151 railway stations.  Operates 1,60,251 trains including 9,550 engers trains, carrying about 1.6 million tones of freight and about 18 million engers daily.  Worlds largest commercial or utility employer, with more than 1.5 million employees on its payrolls.

PROBLEMS FACED BY IR

 Some

regions are beyond the reach of railways due to unfavourable geographical conditions.   Railways are facing stiff competition from road transport and thus its share in enger and goods traffic is declining.  Railways have huge outstanding payments to diesel and electric power supply companies.  The railways have to develop uneconomic projects due to political pressures and interferences.

CORRECTIVE MEASURES  Modernization.  Safety

and security of engers.  Replacement and renewal of assets.  Computerization of railway systems.  Introduction of new technologies for signaling and telecom.  Prevention of leakages of Revenue.  Increase in productivity and reduction in Operating ratio.

NEXT 5 YEARS GOALS OF IR 1.

2. 3.

To deliver a sustained and measurable improvement in customer experience. To make Rail a safer means of travel. To expand Bhartiya Rail’s capacity substantially and modernize infrastructure i.e. to increase daily engers carrying capacity, increase track length and to grow the annual freight carrying capacity.

4.

To make Bhartiya Rail financially selfsustainable.

STRATEGIES TO ACHIEVE GOALS… Quality of life in journeys- Cleanliness, 24x7 helpline, catering, e-ticketing, more coaches, etc.  Station Redevelopment.  Improving train speed and introducing Bullet trains.  Safety- Train Protection Warning System etc.  Transparency and Governance initiatives.  Social initiatives like promotion of products made by Self Help Groups.  Tourism- Incredible Rail for Incredible India to be launched. 

CONCLUSION Better, cheaper and faster than other means of transports.

A monopoly is a firm that is the sole seller in its market.

Various schemes like PPP for attracting more investment. Indian Railways has launched a mobile application for booking unreserved tickets.

It faces a downward sloping demand curve for its product. Monopolists can raise their profits by charging different prices to different buyers based on willingness to pay. Railways was first introduced in 1853 and grows in India with the encouragement of British Government.

THANK YOU