Rail Budget Proposes FDI, Private Investment, PPP Projects

Having already effected a steep hike, the railway budget for 2014-15 spared passengers of any fresh revision in fares and freight rates but pitched for reforms by proposing private and Foreign Direct Investment and Public Private Partnership (PPP) to meet the resource crunch.

Presenting his maiden budget for 2014-15 in the Lok Sabha, Railway Minister Sadananda Gowda said he plans to leverage railway PSU resources by bringing in their investible funds in infrastructure projects.

The pre-budget hike of 14.2 per cent on fares and 6.5 per cent on freight rates announced on June 19 will fetch Rs.8,000 crore, he said. The roll-back of proposals on monthly season tickets would involve a sacrifice of Rs. 610 crore.

Gifting Prime Minister Narendra Modi's home state Gujarat, he announced plans for introduction of a bullet train in Mumbai-Ahmedabad sector which will cost Rs.60,000 crore.

Mr Gowda said the budget seeks course correction in the light of mismanagement, apathy, populism in starting projects and severe fund crunch that have inflicted the railways over the years.

In his post-budget briefing, Mr Gowda said the railways would continue with the Fuel Adjustment Costs (FAC) formula under which there will be periodic hike in fares and freight rates once in six months.

He said faced with resource crunch the government proposed to attract private and foreign investment to tide over the situation.

"We need huge investment for running bullet train. There was a ban on FDI in railways. Now we would request Commerce Ministry to delete that clause so that there can be FDI in infrastructure development," the minister said adding the Cabinet has to take a call.

Asked at his briefing as to what is the cap the railways would like on FDI, Railway Board Chairman Arunendra Kumar said "we would like it to be 100 per cent."