Budget 2017:Indian Railway May allow Private Player Participation to Run Rail Network

Budget 2017:Indian Railway May allow Private Player Participation to Run Rail Network

Railway Budget 2017: Modi government may allow airport-like private player participation in railways, says TV report

The Narendra Modi government is looking at a proposal to allow private players to run rail network on the lines of the airport leasing model.

Are private players all set to get the opportunity to run rail lines of the Indian Railways? If a report in ET Now is to be believed, then the Narendra Modi government is looking at a proposal to allow private players to run rail network on the lines of the airport leasing model. The government weighing the proposal that will allow private operators to run trains using government tracks and stations. According to the channel, the government is keen to allow private players in core rail activities. The move to consider such a step comes in the backdrop of the fact that freight traffic is down and cannot be relied on anymore to subsidise passenger fares, the channel reported. Finance Minister Arun Jaitley may introduce this proposal in this year’s Budget 2017.

This year the Budget 2017 is unique not only because of the fact that it has been preponed to February 1, but also because it will include the Railway Budget. For the first time in Independent India, a separate Railway Budget will not be presented. Recently, Finance Minister Arun Jaitley made a case for the railways to outsource non-core functions like hospitality services.

As the Indian Railways is saddled with under-recovery of over Rs 32,000 crore from the passenger segment, an across-the-board hike in fares could be expected soon. Though the transporter manages to fend for itself, its mammoth, legitimate capex needs are a nagging burden on the exchequer and so commuters will have to pay up, Jaitley has indicated.

Speaking at a conference on Accounting Reforms in Railways organised by the Confederation of Indian Industry (CII), Jaitley said, “Railways got caught in a battle where populism prevailed over performance.. For any commercial establishment to be run, the first essential principle is that consumers must pay for the services that they receive.”

Revenue from the passenger segment is estimated to be Rs 52,000 crore for the current fiscal, up 12% from last fiscal. Revenue from the passenger segment is just over a quarter of the railways’ gross traffic receipts, as the bulk of its revenue comes from freight, with coal, foodgrains, iron ore and cement being the virtual milch cows for it.

Source:Indian Express