The aim of the Railway Budget is to reclaim the market share in freight movement that has been lost over the years to the road transport sector, said Minister for Railways Suresh Prabhu.

“To get back the market share lost to the road sector, we have to increase capacity. Now, to increase capacity we need to invest money and look at not only public-private-partnership investment but also debt from multilateral development banks and sovereign funds,” said Prabhu.

The Indian Railways’ market share in freight movement which was once 90 per cent has come down to nearly 35 per cent.

“The market share that we have lost to road sector is not because of the freight rates, it is because investment in roads has been three times more than in Railways. Today, even if we want to reclaim 5 per cent of the share, we don’t have capacity,” he said, while defending the increase in freight charges.

Explaining the idea of increasing capacity by tapping into debt, Prabhu said that traditionally Railways has looked at only internal resources and gross budgetary support but globally infrastructure grows by borrowing money.

“If you look at the debt to equity ratio, what we are proposing is 60:40 ratio. Freight charge increase is just a small part of the scheme of things. If you look at the other sectors in our country like power and roads, they have all added capacity through debt,” the Minister said. Prabhu was interacting with industry leaders after presenting the Railway Budget at a meet organised by the Confederation of Indian Industry.

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