A rail system in India was first put forward in 1832 in Madras but it never materialised. In the 1840s, other proposals were forwarded to the British East India Company who governed India. The Governor-General of India at that time, Lord Hardinge deliberated on the proposal from the commercial, military and political viewpoints. He came to the conclusion that the East India Company should assist private capitalists who sought to setup a rail system in India, regardless of the commercial viability of their project.
In 1844, British civil engineer Robert Stephenson's published work titled: Report upon the Practicability and Advantages of the Introduction of Railways into British India led to widespread investor interest in the UK. By 1845, two companies, the East Indian Railway Company operating from Calcutta, and the Great Indian Peninsula Railway (GIPR) operating from Bombay, were formed. The first train in India was operational on 1851-12-22, used for the hauling of construction material in Roorkee. A few years later, on 1853-04-16, the first passenger train between Bori Bunder, Bombay and Thana covering a distance of 34 km (21 miles) was inaugurated, formally heralding the birth of railways in India.
The British government encouraged the setting up of railways by private investors under a scheme that would guarantee an annual return of 5% during the initial years of operation. Once completed, the company would be passed under government ownership, but would be operated by the company that built them. Robert Maitland Brereton, a British engineer was responsible for the expansion of the railway from 1857 onwards. In March 1870, he was responsible for the linking of both the rail systems, which by then had a network of 6,400 km (4,000 miles).
By 1880 the network had a route mileage of about 14,500 km (9,000 miles), mostly radiating inward from the three major port cities of Bombay, Madras and Calcutta. By 1895, India had started building its own locomotives, and in 1896 sent engineers and locomotives to help build the Ugandan Railways.
In 1900, the GIPR became a government owned company. The network spread to modern day states of Assam, Rajasthan and Andhra Pradesh and soon various independent kingdoms began to have their own rail systems. In 1901, an early Railway Board was constituted, but the powers were formally invested under Lord Curzon. It served under the Department of Commerce and Industry and had a government railway official serving as chairman, and a railway manager from England and an agent of one of the company railways as the other two members. For the first time in its history, the Railways began to make a profit.
In 1907 almost all the rail companies were taken over by the government. The following year, the first electric locomotive makes its appearance. With the arrival of World War I, the railways were used to meet the needs of the British outside India. With the end of the war, the state of the railways was in disrepair and collapse.
In 1920, with the network having expanded to 61,220 km, a need for central management was mooted by Sir William Acworth. Based on the East India Railway Committee chaired by Acworth, the government takes over the management of the Railways and detaches the finances of the Railways from other governmental revenues.
The period between 1920 to 1929 was a period of economic boom. Following the Great Depression, the company suffered economically for the next eight years. The Second World War severely crippled the railways. Trains were diverted to the Middle East and the railways workshops were converted to munitions workshops. By 1946 all rail systems were taken over by the governmen
