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No Fear No Favour

Modi Government is looking to privatise the Indian Railways, May allows airport-like private player participation.

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.

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