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?

The initial development of railways in India followed the 'Guarantee System.' Under this system, private British railway companies were provided land free of cost by the British Government in India. Furthermore, the government guaranteed a minimum return of 5 percent on the capital invested by these private companies, ensuring they received this dividend even if the venture incurred losses or yielded inadequate profits. However, statement 3 is incorrect because the railways were not jointly managed; they were primarily private British-owned and operated enterprises during the initial phase [1]. The government only possessed broad regulatory powers and the option to purchase the companies after 25 or 50 years [2]. Thus, only statements 1 and 2 are correct.

Sources

1. [1] Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 12: Transport, Communications and Trade > Rail Transport > p. 11
2. [2] https://warwick.ac.uk/fac/soc/economics/intranet/manage/calendar/railways_may_2010-all.pdf