Link to the above on Inia rail.

http://en.wikipedia.org/wiki/Dedicated_Freight_Corridor_Corporation_of_India

In India with cheap labour rail freight probably works.

In Oz the cost of transferring freight from truck to rail, & back to trucks for final delivery is usually greater than the cost of delivering it all the way by truck, unless it is a complete container load.

When public transport is an ideological goal unto itself, when the idea is to force different people from all walks of life to smell each other's farts (especially of the verbal and mental varieties), then no logical arguments matter.