FDI in railways - New year Gift by UPA
Yes. You are reading it right. UPA is all set to do a joint venture wit th Private players from foreign.
However, FDI will be allowed only in construction and maintenance of railway projects, and not in operations. Major players would be chinese companies as sources confirm it.
The ministry of commerce and industry has proposed upto 74% FDI in JV and Colaborations in certain areas and 100% in other areas.
The Ministry of railways have planned to earn Rs 60,000 crore through these projects including construction of factories to manufacture locomotives and coaches.
At present FDI in railways was only allowed for Mass Rapid transport component manufacturing with a total stake of Rs 1354.65 crores till date starting from April 2000.
Industries Act has to be amended to the Schedule I of Industries Act 1951 that currently does not allow FDI in sectors such as atomic energy and railways.
So its proved, government is left with no funds. Selling every possible thing to fill the treasury. But any how we can assume that these foreign players will not obtain contracts by Indian ways ;),
And the rail security on tracks will increase(Hope).
FDI in railways is really un necessary, If operations are run efficiently then Indian Railways can itself generate significant revenues and also they have amazing land banks which can be leveraged instead the foreign players are being brought in unnecessarily. This is clearly lack of creative thinking or is a classic case of Large scale corruption, I dont know which is bad.