Cabinet clears 100% FDI in Railways infrastructure, 49% in defence

[Daedalus]

Moving ahead with the economic reforms, the Cabinet on Wednesday cleared the long-delayed proposal for raising FDI limit in defence to 49 percent and fully opened up the railway infrastructure segment, like high-speed trains, for foreign investment.

The decisions taken at the Cabinet meeting headed by Prime Minister Narendra Modi here came barely two weeks after the one to raise the cap of FDI in insurance sector from 26 percent to 49 percent.

FDI ceiling in the sensitive defence sector has been hiked to 49 percent from current 26 percent, with the condition that of the control in joint venture manufacturing defence equipment will remain Indian hands.
The move is aimed at boosting domestic industry of a country which imports up to 70 percent of its military hardware.

The proposal had been pending for several years as it was first mooted by the Commerce Ministry during the previos UPA government. However, the then Defence Minister A K Antony had blocked it, citing national security concerns.

The NDA government has been arguing that the FDI limit needs to be hiked in defence to help expand the domestic industrial base in the sector.

The Cabinet also approved a proposal to open up cash-strapped railways to foreign investment by allowing 100 percent FDI in areas such as high-speed train systems, suburban corridors and dedicated freight line projects implemented in PPP mode.

The FDI liberalisation in the sector would help in modernisation and expansion of the railway projects. However, FDI will not be allowed in train operations and safety.

According to estimates, the sector is facing a cash crunch of around Rs 29,000 crore and allowing of FDI will help mop up resources.

Cabinet clears 100% FDI in Railways infrastructure, 49% in defence

 

[Echo_419]

Moving ahead with the economic reforms, the Cabinet on Wednesday cleared the long-delayed proposal for raising FDI limit in defence to 49 percent and fully opened up the railway infrastructure segment, like high-speed trains, for foreign investment.

The decisions taken at the Cabinet meeting headed by Prime Minister Narendra Modi here came barely two weeks after the one to raise the cap of FDI in insurance sector from 26 percent to 49 percent.

FDI ceiling in the sensitive defence sector has been hiked to 49 percent from current 26 percent, with the condition that of the control in joint venture manufacturing defence equipment will remain Indian hands.
The move is aimed at boosting domestic industry of a country which imports up to 70 percent of its military hardware.

The proposal had been pending for several years as it was first mooted by the Commerce Ministry during the previos UPA government. However, the then Defence Minister A K Antony had blocked it, citing national security concerns.

The NDA government has been arguing that the FDI limit needs to be hiked in defence to help expand the domestic industrial base in the sector.

The Cabinet also approved a proposal to open up cash-strapped railways to foreign investment by allowing 100 percent FDI in areas such as high-speed train systems, suburban corridors and dedicated freight line projects implemented in PPP mode.

The FDI liberalisation in the sector would help in modernisation and expansion of the railway projects. However, FDI will not be allowed in train operations and safety.

According to estimates, the sector is facing a cash crunch of around Rs 29,000 crore and allowing of FDI will help mop up resources.

Cabinet clears 100% FDI in Railways infrastructure, 49% in defence

Great news,more investment is needed in both the areas

 

[JohnyD]

Railways indeed need private investment, there is so much scope...I dont want to believe buts its true, in India we have to book long distance railway tickets more than 2 months in advance...and in most of the cases, within 15-30 mins after opening up the bookings, confirmed tickets run out of stock and u end up in waiting list!

 

[Jai_Hind]

Isn't 100% FDI in Railways going to increase the fare...???

 

[IndoUS]

Railways indeed need private investment, there is so much scope...I dont want to believe buts its true, in India we have to book long distance railway tickets more than 2 months in advance...and in most of the cases, within 15-30 mins after opening up the bookings, confirmed tickets run out of stock and u end up in waiting list!

Or just put some money in the TT pocket like I do, that always seem to get an empty seat even when they say no more seats are available.

 

[JohnyD]

Or just put some money in the TT pocket like I do, that always seem to get an empty seat even when they say no more seats are available.

when u need to travel with ur faimily u dont want to take any risk...and in 1st Class and 2Tier AC u wont find any berths even if u r ready to put something in TTs pocket..bribing is not the solution dude..capacity building is what we should ask for...

Isn't 100% FDI in Railways going to increase the fare...???

how? competition mostly helps..

 

[indoPunjabi]

I hope both the bills will get passed in rajya sabha where Congress is in NO mood to cooperate with modi sarkar. They'll oppose every single bill modi sarkar will bring in the house.

 

[Jai_Hind]

how? competition mostly helps..

Yes competition helps, but Indian Railway mostly earns from their freight services and balances up the profit with mail and passenger trains. So do you think private players will be able to do so...??

For ex. check out the diff in fare/km between kolkata metro (Indian railway) and Delhi(DMRC), although delhi metro is owned by a govt body.

 

[axisofevil]

http://www-igcc.ucsd.edu/assets/001/505308.pdf

 

[IndoUS]

Yes competition helps, but Indian Railway mostly earns from their freight services and balances up the profit with mail and passenger trains. So do you think private players will be able to do so...??

For ex. check out the diff in fare/km between kolkata metro (Indian railway) and Delhi(DMRC), although delhi metro is owned by a govt body.

Mate, I doubt there would be much changes to passenger fairs main reason being majority of population relies on these network. Though they might increase freight charges. But then they wold also have to increase their capacity in transportation and faster transportation otherwise companies would abandon them. So let's see how far this goes.

 

[Jai_Hind]

Mate, I doubt there would be much changes to passenger fairs main reason being majority of population relies on these network. Though they might increase freight charges. But then they wold also have to increase their capacity in transportation and faster transportation otherwise companies would abandon them. So let's see how far this goes.

Modernization along with fare check.... yes, only time will tell what railways have for us in future

 

[NKVD]

Modernization along with fare check.... yes, only time will tell what railways have for us in future

Well allowing privatisation is great step it will revive the Indian railway's which is on its death bed.govt companies are just became un healed wound not performing probably.hope this Babu culture will end soon

 

[sree45]

Isn't 100% FDI in Railways going to increase the fare...???

FDI is not in railways. But in RAILWAY INFRASTRUCTURE(Like coach factories, modernization of railway stations etc). The operations of Indian Railways stays with GoI

 

[Jai_Hind]

Well allowing privatisation is great step it will revive the Indian railway's which is on its death bed.govt companies are just became un healed wound not performing probably.hope this Babu culture will end soon

Who said IR is in its death bed... Yes I agree we dont have those europe and japan like superfast trains to show off, but the trains we have are doing a damn good job. Mind you its the only means of long distance transport which is affordable even by the poorest, and our country is still a poor one...

I am not against privatisation, I just hope it doesnt increase the fare much and take away the last resort of many.

FDI is not in railways. But in RAILWAY INFRASTRUCTURE(Like coach factories, modernization of railway stations etc). The operations of Indian Railways stays with GoI

That would be excellent cause our railway infrastructure needs some serious facelift.....

 

[navtrek]

Modernization along with fare check.... yes, only time will tell what railways have for us in future

We have to pay for what we use right. Why ask for subsidized prices. Let it be just and fair pay as you use.