New Delhi - India said it would start bullet-train services and seek overseas investment to modernise its railways as Prime Minister Narendra Modi began unfolding his policies after taking charge in May.
Overseas investors would be allowed to invest in railroad infrastructure, except the actual operation of trains, Rail Minister Sadananda Gowda said in parliament yesterday as he unveiled the railway budget for the year to March next year.
Gowda also announced a high-speed train to connect financial hub Mumbai with Ahmedabad in the western state of Gujarat, and pared back borrowing to repair the financial health of Asia’s oldest railway network.
The proposals could bring in investments from companies such as General Electric and Bombardier as Modi aims to fix the nation’s creaky infrastructure with new high-speed trains and urban transport services.
Gowda said last month the state-run railway needed to focus on improving safety and punctuality, raise average speed to at least 150km/h and become more competitive with road transport.
of the railway sector depends heavily on availability of funds for investment in rail infrastructure,” he told parliament. “Internal revenue sources and government funding are insufficient to meet the requirement.”
Indian Railways raised passenger and freight fares last month, giving Modi room to cut subsidies after he said he was ready to take unpopular steps to improve the fiscal health. Modi led his party to a landslide election win last month with the promise of economic development and slower inflation.
India would set up a diamond quadrilateral network of high-speed rail connecting major cities and growth centres and 1 billion rupees (R181m) had been set aside in the budget for initiating the project, Gowda said.
The operator aimed to increase the speed of trains to as much as 200 km/h on nine routes, Gowda said.
The government planned to set up freight terminals in collaboration with private sector companies to build a network of such facilities, the minister said.
Gowda proposed market borrowing of 117.9 billion rupees in the year to March, compared with the estimate of 128 billion rupees in the interim budget.
“The initiatives taken in the rail budget reflect the government’s vision not only for the railways but through it for the nation as a whole,” Modi said in a televised address after the budget presentation. “This is our dream and we will fulfil it.”
Finance Minister Arun Jaitley will present the Modi government’s first Budget tomorrow. Indian Railways has tabled its own budget since 1925. – Bloomberg