Will Railways signal investor-friendly policies in Budget?

Days before increasing the passenger fares and freight rates, Railway Minister DV Sadananda Gowda had told Business Line that railway users — both passenger and freight — will complain if they are made to pay more without simultaneous improvement in services.

Having increased the tariffs, the biggest challenge now for the Railways in this Budget, is to come up with proposals that ensure users get value for their money.

“Passengers want clean trains, good food, good ticket booking service and the ability to travel when they want. Freight users want good loading-unloading space and wagon availability when they want to move goods. Now that the financial burden is somewhat lightened, the key issue for the Railways would be to modernise,” Vivek Sahai, former Railway Board Chairman, told

Business Line . Sahai was also advisor to former Railway Minister Mallikarjun Kharge. And though Prime Minister Narendra Modi has already hinted at a bigger role for the private sector, railway experts are waiting for signals that will make policies more investor-friendly.

Private investment

“Ideally, if one wants a paradigm shift in getting investments, the Railways has to look at investor concerns in various existing policies such as land utilisation, private freight terminals, private participation in wagon procurement and container train operators,” said Subodh Jain, former Member-Engineering, Railway Board.

Echoing similar views, Sahai said, “For all the talk about attracting foreign direct and private investments, Government servants will have to understand that some risk will have to be borne by the Government instead of passing them to the private investor.”

Jain said that Railways would identify select areas that it can outsource to the private sector, without disturbing the apple cart.

For instance, it could outsource operations and maintenance of branch-lines with low traffic levels, such as those where less than three passenger trains are run a day and less than five million tonnes of cargo are handled in a year. If loss-making lines have to be kept operational due to the interests of specific stakeholders, such as State Governments, Defence Ministry and the Home Ministry, then those stakeholders should bear part of the operational losses.

More connectivity to the North-East, upgrading stations, greater use of IT, attempt to use solar energy, better designed coaches, lighter wagons, more electrification, faster freight corridor, higher speed trains and port and coal link constructions are some of the issues that are expected to be on the Railways’ radar.