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 early development of Indian railways from the 1850s under the British was based on the 'guarantee system'. Under this arrangement, private British companies were given free land for laying tracks, were guaranteed a minimum return of 5% on their invested capital by the colonial government even if the railways ran at a loss or yielded inadequate profits, and the railways were to be jointly managed/regulated with the government, with the option for the government to purchase the lines after a stipulated period. All three statements correctly describe features of the guarantee system, so the answer is 3.