Railways can contribute 2 percent to GDP: Suresh Prabhu

The railways can contribute up to two percent to the gross domestic product (GDP), Railway Minister Suresh Prabhu said on Sunday adding that he has asked the railway board to identify key issues and focus areas towards this end.

Speaking at an event here organised by the Confederation of Indian Industry, Prabhu, who presented the railway budget for 2015-16 on Thursday, said public sector banks and the ministry will work together on expanding the rail network.

The ministry is also expected to sign agreements with financial institutions to fund project and issue tax free bonds soon.

"Railways is keen to deepen the participation of private sector in railway," Prabhu said according to a release by the CII.

He also said that the railway ministry needs to completely revamp the public-private partnership (PPP) model to make it successful.

"During the interaction, members (CII national council) emphasized on the need for better risk-reward sharing in PPP projects, using land as equity component," CII said.