Noting that Railways was caught in a "vicious circle" of poor investments compromising services, Minister Suresh Prabhu today pitched for greater investment to improve the infrastructure of the government behemoth.
He said proper investments in the rail infrastructure could turn the Indian Railways into an engine of growth in the coming years.
Admitting that Railways finances were in "deep trouble", the Minister said railways required huge investments to expand its network to provide physical connectivity. He was of the view that 30 to 40,000 km of lines need to be expanded to carry more cargo besides people.
Speaking at the Economic Times Global Business Summit, Prabhu said Railways can contribute 2.5% to three% in the GDP with an improved infrastructure.
But at the same time, he pointed out that India does not have the required institutions to invest in such sectors. Pension fund, he said, was one such possibility which could help pump investments.
Giving the example of Naxal-hit areas, Prabhu said besides carrying security personnel, a better railway infrastructure could bring more investments in such places and create job opportunities.
Successive governments have been of the view that jobs can wean away youth from naxalism and militancy.
Referring to Prime Minister Narendra Modi's aim of taking the economy to USD 20 trillion from USD 2 trillion, he said policies which are ambitious and at the same time "doable" can help achieve the target.
He batted for reforming the government accounts to put in place a system where expenditures could be tracked to ensure that every rupee spent is used for the purpose it was intended to be. "It will result in spin off benefits," he said.
Prabhu said GST would help broaden the tax base and help increase tax to GDP ratio.
Terming lack of physical infrastructure as a "road block", Prabhu said many things have to be put in order to achieve the desired growth levels.
He said after setting targets, there was a a need to put in place a strategy to achieve the objectives and the Modi government was working on it.