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“There is a misunderstanding that Railways is being privatised. However, I want to make it clear that we are not privatising Railways. We cannot go in this direction. You don’t have to worry. It is neither our wish nor thinking,” Modi said in the central Indian state of Uttar Pradesh on Thursday. India’s state-owned railways are the fourth-largest in the world.
“We need to understand and appreciate the potential of the Railways’ huge infrastructure which, if utilised properly, can transform the country’s economy,” he added.
The Prime Minister, however, allayed fears over introducing private and foreign investment for improving railway infrastructure.
“Please have no fear. If a foreign company contributes in improving the condition of our railway stations and in the bargain erects a skyscraper in the vicinity, the country will be the ultimate gainer,” he said.
Experts say India’s railways need $334 billion of investment by 2020. For the five years ended April 2012, when there was a $16 billion investment target, public-private partnerships accounted for only 4 per cent of the total.
The railways cost the government around $5 billion a year in subsidies and spend 94 per cent of revenues on operating costs.
The Indian Prime Minister on Thursday promised to seek foreign and private funding for the railways, but gave no details of how he would lure investors.
The Indian railways have suffered from years of low investment and populist policies that have kept fares low.
In the rail budget this year, the government revised up planned spending to 654.45 billion Indian rupees for the year ending in March 2015.
Indian Prime Minister Modi has vowed fiscal discipline as he looks to revive economic growth from near a decade low.
1.54 million people work for the Indian Railways, according to its website, and about 23 million people ride the network each day.
TBP and Agencies