If IR is fully private, you can also be 100% sure that a large population in India will lose access to frequent, regular train connections. It is understandable that you are concerned about corruption etc, but please don't think that privatization will solve everything. You have mentioned Telecom as an example about how privatization will reduce the prices. But there are NO similarities between creating a rail network and telephone network. Increasing capacity in a telephone network practically costs nothing, compared to increasing network in railways.
You have given China as an example of more efficient railways, but understand that other than USA, Canada and a few other countries, ALL the world's major rail networks are Nationalized (Directly...
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owned by the state). You can see in the following link:
click here
If you see in the above webpage, you can see that in India, there are more than 18000 people per km of railway track. This is more than 1.5 times that of China. Indian railways serves more than 25 million people per day, which is more than the population of several countries.
Most of the sectors that have been successfully privatized are those which cater only to a small portion of the population ( Air transport ) or where increasing capacity is a trivial thing ( Most electronics based industries like Telecom).
More than 80% of IR's expenditure is on just running trains and maintaining the stations ( Basically fuel bills, electricity bills etc). All the spending on employes salaries or 'bungalows' is only a small part of the total. And the passenger division is running in losses BECAUSE the tickets are priced very cheap for common people not because of the money being 'eaten up by corrupt officials'. The benefit with a government run IR is that it is obliged to run services to all places and give more importance to giving connectivity to people than money-making. You minimum ticket price will not be '3Rs', it'll more likely be 50Rs.
Definitely short stretches can be privatized like the upcoming Metros etc, but IR cannot be privatized. There are simply TOO many people for a private operator to handle! And unlike IR, private operators cannot run at >90% operating ratio for such a long time. They'll collapse or go bankrupt very soon.