Wednesday 7 December 2022
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EconomyPolicy to rejuvenate economy of railway land approved

Policy to rejuvenate economy of railway land approved

In an attempt to turn the economy of areas where railway properties are located, the union cabinet approved the policy on long-term leasing of Indian Railways' land, reducing the licence fees from 6% to 1.5%, Minister of Information and Broadcasting Anurag Thakur said. The lease period has also been increased from five years to 35 years.

The cabinet's approval for the much-awaited to the Railway Policy would ease the strategic divestment process of Container Corporation of India (Concor) and make it more attractive to private investors. The is in line with Niti's recommendation to keep the railway land leasing fee for containers below 3%.

The proposed changes will pave way for of Concor as it will help strategic buyers pay much less amounts as rentals to railways for a longer period. This was one of the key suggestions put forward by the investment advisors of Concor.

The cabinet had in November 2019 approved the divestment of the government's 30.8% shareholding in the company, along with the transfer of management control.

While stating the benefits of the policy, the government said the move will help increase railways' modal in freight transportation and reduce the logistics costs of the industry. The government also said that the revised policy will bring more revenue to railways and create 1.2 lakh jobs.

Further, as part of the new amendment, existing entities using railway for cargo terminals will have the option to switch to the new policy regime after a transparent and competitive bidding process.

The will also help the government develop 300 cargo terminals across India in the next five years and will benefit the implementation of the PM Gati Shakti framework.

The changes under the new policy that will be implemented in the next 90 days are expected to increase the modal share of rail in freight transportation and reduce overall logistic costs.

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