Railway Budget 2014 proposes FDI, private investment, PPP projects

PTI | Jul 8, 2014, 06.47 PM IST

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Highlights of Rail Budget 2014
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NEW DELHI: 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.

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, 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.

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A goods train near Navi Mumbai. (Getty Images photo)

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.

READ ALSO: 58 new trains, branded foods, focus on safety

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."

Rail Budget as growth-oriented, India Inc says

Terming the Rail Budget as growth-oriented, India Inc on Tuesday said the emphasis on forging PPP
and attracting FDI will give a boost to infrastructure development and generate jobs.

"We welcome the proposal for financing bulk of future projects through PPP route that will help
overcome the constraint of low investment, enhance connectivity and accelerate the process of
modernization," Ficci president Sidharth Birla said.


Young passengers peer out of windows of a train at a railway station in Puri. (AP photo)

Presenting the Narendra Modi government's maiden Rail Budget, railway minister Sadananda
Gowda announced setting up of logistic parks and private freight terminals on PPP model. Noting
that the capital intensive railways has not been successful in raising substantial resource through
PPP route, Gowda said that bulk of future projects would be financed through this mode, including
the high-speed rail, which requires huge investments.

"Once you do a PPP it stands on its own. A special purpose vehicle gets created separately and that
company is accountable for its return on investment. So, the Indian railways will benefit from it if it's
profitable, otherwise it will not benefit," president & CEO South Asia GE Transportation Nalin Jain
said at a CII conference here.

Asked about potential areas where FDI can be attracted, he said: "Locomotive, manufacturing,
wagons anything which is moving, are areas where FDI can come in." managing director of Alstom
Transport India Bharat Salhotra said: "Opening the railways' sector to foreign direct investment is a
welcome move that would provide the much- needed push to the cash-strapped sector as well as
foster creation of world class rail infrastructure."


Railway minister DV Sadananda Gowda (left) and minister of state for railway, Manoj Singha hold up
their briefcases at Parliament House before presenting the Railway Budget 2014-15 on June 8, 2014.
(TOI photo by Yogesh Kumar)

PHD Chamber of Commerce president Sharad Jaipuria said the announcements would go a long way
to enhance rail infrastructure and generate employment opportunities. Chief executive of railway
business at Larsen & Toubro Rajeev Jyoti sought more clarity on the proposal to seek Cabinet
approval on foreign direct investment (FDI). "If you have an FDI, you are not going to open FDI with
no criterion ..." he said.

CII president designate Sumit Mazumder said: "If projects are made attractive to private investors,
funds through PPP and FDI will be available. Multilateral funding should also be accessed for high-
speed corridors". Mahindra & Mahindra CMD Anand Mahindra tweeted: "Renewable energy inputs,
e-enablement, more pvt sector involvement. And no megalomaniacal schemes.

What more were the markets looking for?" Assocham president Rana Kapoor said the PPP models
will attract a lot of private and overseas investment as the new government enjoys a great amount
of credibility to deliver.
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rjkmail2004 (India)
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Scandals I railway bookings must be stopped.
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rjkmail2004 (India)
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Let us hope the mess doesn't become messier.
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rjkmail2004 (India)
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Let us see how the new regime makes railways more comfortable.
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rjkmail2004 (India)
130 Followers
0 min ago Platinum: 26.5KInfluencer7Moderator3Wordsmith7
No one has plans to run the railways better , but every one is talking big.
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rjkmail2004 (India)
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There are plans to run new trains but old ones. Are not being run properly.
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rjkmail2004 (India)
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A new gift of new government. Railway fares will increase every month.
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rjkmail2004 (India)
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No megalomaniacal scheme please!
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Saurabh Jain (Unknown)
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3 mins ago Platinum: 28.5KNetworker2WordsmithNews King2
Congress acting as a barrier to Slow down Modi's bullet train
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rjkmail2004 (India)
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How about the railway safety?
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Saurabh Jain (Unknown)
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4 mins ago Platinum: 28.5KNetworker2WordsmithNews King2
Don't know why congress is opposing the budget
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rjkmail2004 (India)
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BJP government is taking the credit for every good thing done by the earlier regime but blaming it
for everything that went wrong.
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rjkmail2004 (India)
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Politicians have made a mockery of country's finances.
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rjkmail2004 (India)
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Politicians play with the finances of the country.
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Indranil Chowdhury (Unknown)
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9 mins ago Gold: 16.8KMovie BuffWordsmith3News King2
he 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, Gowda said the railways would continue with the
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rjkmail2004 (India)
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I am not very hopeful that much will change.
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()
10 mins ago
50+ years passed frm indpndent, so many schemes ,price increases and annoucements ....the ground
work never changed in any spheres look and adopt from seeing neibhours , india nowhere in
matching it, except space programmes, the future lies with not with govt, we all every single person
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rjkmail2004 (India)
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10 mins ago Platinum: 26.5KInfluencer7Moderator3Wordsmith7
Millions of concessions have been given to MPs and MLAs and the common man's pocket is picked
for them.
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rjkmail2004 (India)
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Many promises have been made but much will depend on performance.
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rjkmail2004 (India)
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12 mins ago Platinum: 26.5KInfluencer7Moderator3Wordsmith7
PPP and FDI look rosy from outside but no one joins you without raking profits.
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rjkmail2004 (India)
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Many promises. Will the delivery be equally good?
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Abidi Mohammad (Unknown)
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Ye rail Budget tha ya railway ka privatization?
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fighter (India)
15 mins ago
Both parties thrashed India.. Govtise everthing and make to work in govt.. That should be the prime
targets of govt.. We got independence from British by saying "Our country we can manage".. After
67 years you started to handover everything to him again.. What's the point??
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Suresh Sarvaiya (Raipur Chhattisgarh)
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16 mins ago Platinum: 30.3KInfluencer7Movie Buff2Wordsmith6
Railway Budget 2014 proposes FDI, private investment, PPP projects - It is fact that railways
department is bankrupt due to populism measures taken by the previous UPA government during
last 10 years. It is also fact that despite not increasing passenger fair, the fair were going up due to
back door charges. Loss can be bearable for a certain extent, beyond that extent loss becomes
unbearable. Today railway is facing this big problem how to earn revenue. It is also fact that Modi
Government will not increase passenger fair in its maiden rail budget. The reason is well know to us
that in recent past the present government has implemented the decision of UPA government to
increase fair by 14 %. Today, increase in rent is not an issue. People desirous to pay more for rail
journey, provided the facilities being extended by the railway must be of quality suits to the people.
Sometime, it is surprised to say that whenever a drinking water is being sold @ 20/-, Tea of Rs. 5 for
7, meals of Rs. 45/- to 55-60, cold drinks, snacks above MRP, at that time these so called leaders are
keeping quite. Why? Because whenever they travelled, every thing is available to them through their
supporters and they are happy. They can't understand the pain of ordinary passengers. As always
experienced that the ruling party & its allies will support the budget and opposition has to criticise it,
overall the budget presented is of satisfactory nature, provided it is implemented as it is declared in
the budget.
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rjkmail2004 (India)
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17 mins ago Platinum: 26.5KInfluencer7Moderator3Wordsmith7
PPP and FDIC will be attracted only if there is a plan.
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Rishi Padda (OneWorld) replies to rjkmail2004
1 min ago Silver: 624WordsmithNews King3Frequent Flyer3
You think they are just talking?
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amar nath (meerut UP India)
24 Followers
17 mins ago Gold: 7.7KInfluencer4Wordsmith5Networker
good budget , provisions like escalators, lifts green toilets etc should be provided as early as
possible. the battery operated car s for senior citizen be arranged and operated by volenteers of
railways railway has scout wing this work can be given to them to collect donations and operate the
cart. for cleaniness on the plateforms and railway lines water can be used as a transporter and same
can be used number of times after recycling
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