The Narendra Modi government’s decision to revise the long-term leasing policy for railway land will go a long way to realise the untapped potential of vast tracts of unused land. The new policy reduces the lease fee for railway land used for cargo-related activities to 1.5 per cent of the market value of land per annum from the present six per cent. The lease tenure has also been enhanced to 35 years as those interested in leasing the land felt the previous tenure of five years was too short to make any huge capital expenditure.
According to an estimate, the Indian Railways owns 60,000 acres of land along the railway tracks. It will also lead to the development of commercial activity at railway stations and increase the possibility of top brands setting up shops. It could also lead to the setting up 300 cargo terminals over the next five years and generate about 1.2 lakh employment. These measures are expected to have the potential to earn Rs 30,000 crore for railways over the next five years.
The Indian Railways is one of the biggest landlords after the central government. It also shares the huge burden of transporting crores of people every day at an affordable cost. It is one of the large employers in the country and it has to foot an enormous pension bill to support retired employees, which entails an expenditure of Rs 1,60,000 crore a year. Despite an ever-increasing welfare agenda, railways have a poor record as a business enterprise. Though the railways continue to be the lifeline of India connecting the remotest parts, its infrastructure is slowly crumbling. It needs urgent repair, which requires humongous amounts of money and for which the railways must find new ways of raising funds by tapping its unused assets.