At a time when the Railways plans to invest Rs 8.56 trillion to develop infrastructure, veteran banker Deepak Parekh on Saturday said the government needs to carefully evaluate its finances and focus on building only core assets.
“The time has come for a careful evaluation of the Railways’ assets. If resources are scarce, there needs to be greater focus on creating core assets while hiving off other assets. Evidently, more out-of-the-box solutions are needed,” Parekh said at a gathering organised by the industry lobby Indian Merchants Chambers. Stating the Railway’s finances need to improve, he pointed out that the national transporter” had last year spent about 93 paise to earn Re 1. This year, the Railways has the added burden of seventh pay commission, estimated at Rs 28,000 crore. Clearly, scarce resources have to be carefully allocated.”
The Railways need to evaluate whether it should continue to have 125 hospitals, 600 polyclinics and 100 schools directly under its wing, he said.
“Secondly, the Railways should monetise some of its vast land holdings. This land parcels may well be used for affordable housing and in turn, it could bring in large resources for the Railways,” Parekh said.
He emphasised that while taking up various infrastructure projects, the government needs to ensure that Railways continue to remain the cheapest mode of transportation for the citizens.”It is equally important to reiterate that the Railways is the lifeline of the common man and remains the cheapest form of transportation, so commercial considerations cannot always drive decisions. There is a need for sensitivity on this issue,” he said.
The banker noted that while we have one of the cheapest passenger fares in the world, it gets skewed by having one of the highest freight rates (and the share of freight has been falling).