Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
Indian Prime Minister Narendra Modi is hoping for more private sector money to modernise the railways which is still the main form of long-distance travel for most of India's population of 1.2 billion people/AFP

World

India rail budget seen seeking more private sector funds

Indian Prime Minister Narendra Modi is hoping for more private sector money to modernise the railways which is still the main form of long-distance travel for most of India's population of 1.2 billion people/AFP

Indian Prime Minister Narendra Modi is hoping for more private sector money to modernise the railways which is still the main form of long distance travel for most of India’s population of 1.2 billion people/AFP

NEW DELHI, July 8- India’s new government is expected to suggest a bigger private sector role in developing the nation’s railway as it presents its bellwether budget Tuesday for the colonial era train network.

The rail finance bill is traditionally regarded by economists as setting the stage for the national budget, due Thursday, in which the right wing government will lay out its economic reform plans.

Prime Minister Narendra Modi last week said in a speech he hopes for more private sector money in modernising the railways, still the main form of long-distance travel for most of India’s population of 1.2 billion people.

“We want the railway stations to have better facilities than airports. This is our dream,” said Modi, whose government is expected to announce more public private partnerships in railway infrastructure.

“You will see a change in near future,” Modi said, adding that “private parties would also be ready to invest because this is a good project economically and will benefit everyone.”

Modi’s Bharatiya Janata Party (BJP), which took office in May after scoring a landslide election win, has also said it favours a greater role for private business in building other infrastructure such as roads and ports.

But the BJP has said modernisation of the decrepit and over burdened train network tops its ambitious agenda for infrastructure building in India.

Dilapidated transportation has held back growth of Asia’s third largest economy, analysts say.

To help fund new wagon purchases, modernise track, revamp lines and improve safety, the government hiked passenger fares by 14.2 percent and freight rates by 6.5 percent — the steepest rise in 15 years and a politically controversial move.

A public outcry saw the government later partially climb down over city commuter fare hikes, underscoring the difficulty in reducing subsidies in a tough economic environment where hundreds of millions of people live in dire poverty.

Advertisement. Scroll to continue reading.

The economy is growing by just under five percent annually, far below the near double-digit pace of a few years ago.

Finance Minister Arun Jaitley underlined Monday in parliament the government’s determination to go ahead with difficult belt-tightening decisions, saying “for any public utility to run, the users must pay”.

The government has also suggested it may open up the railway to foreign investors, and analysts will be looking for any suggestion of such a move in the rail budget as a sign of desire to welcome more outside investment.

Analysts say as much as $500 billion must be invested over the next decade to overhaul the Victorian-era network.

In the national budget, Jaitley is expected to press forward with fuel price rises as part of efforts to curb subsidies.

India’s subsidies on energy, food and fertiliser total some 2.6 trillion rupees ($43 billion) annually.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...