Opening doors for pvt investments only way forward

VIEWPOINT/ Sudheendra Kulkarni, Honorary Advisor to Railway Minister

‘Vision 2020’ document envisages investment of Rs 14 lakh crore over a 10-year period — or about Rs 1 lakh crore a year

Of the four railway budgets that Mamata Banerjee has presented so far, this year’s is, by far, her most important effort. To know the reason, one must view this year’s budget in the context of another document which she frequently referred to in her speech — the landmark ‘Indian Railways Vision 2020’ charter, which she had tabled in the last session of Parliament.

Vision 2020 envisages investment of Rs 14 lakh crore over a ten-year period — or about Rs 1 lakh crore each year. An ambitious figure, indeed! But where will investments of this magnitude come from? The Annual Plan outlay for 2010-11 has been pegged at Rs 41,426 crore. It is nowhere near the target envisaged in the Vision document. There is no basis to believe that the Plan outlay can increase dramatically in the coming years if Indian Railways stick to the conventional sources of mobilising resources.

Obviously, opening the doors for huge private investments is the only way forward. The minister acknowledged this by saying, “The time has come for the business community to come and join hands to build partnerships with the railways… I take this issue seriously. The need of the hour is to develop new business models and invite domestic investment through public-private partnership (PPP) mode.”

Therefore, Indian business houses should now get ready to participate in construction of new lines, world-class stations, manufacturing units of rolling stock, multi-modal logistic parks, high-speed train corridors, port connectivity, mine connectivity, auto hubs, ancillary industries and even dedicated freight corridors.

Banerjee deserves praise for candidly taking note of the “typical negative approach” within the railway establishment that has so far prevented spread of the PPP philosophy, and also for promising to set up a special task force to clear proposals for private investments within 100 days. Expect big change in the coming months.