Opinion When government pushes growth
An internal note circulating in the government has a smart plan one would rarely credit it with. The government plans to divest
An internal note circulating in the government has a smart plan one would rarely credit it with. The government plans to divest the Dedicated Freight Corridor Corporation of India (DFCCIL) almost as soon as its first project rolls out.
A disinvestment is not per se a very radical plan. But just consider this. The DFCCIL is going to house the most value-added railway projects the government plans to construct in a long time. The company is already operational,and once completed,it will be holding two corridors,of which the one carrying freight traffic from the factories of North India to the ring of ports in Western India would be the key operation.
On the way it will cut through a swathe of industrial cities which will have been constructed by the equally remarkable Delhi Mumbai Industrial Corridor Corporation (DMIC). The latter is already a joint venture between the Indian and the Japanese government.
The DFCCIL then promises to be as valuable if not more as the rest of Indian Railways. The government has already made the right beginning by hiving off the entire project to a corporation. Typically these projects are best constructed by the government; typically too the realisation of its maintenance value can be best done by the private sector.
It serves to deflect and make insignificant the discussions about how the rest of the railways can be even corporatised to improve performance. The most improved part of it will have already completed the journey and made the economy richer in the bargain in this decade.
Juxtapose this development with the parallel developments happening in the industrial corridor and the seeds of a new growth story for the Indian economy seem quite real. As of now,the DMIC is doing almost everything right.
Here too each of the projects and the towns are being developed through financial structures that make access to the debt or equity markets easy. The critical elements of the projects are that DMIC is retaining the right to add value from the monetisation of land in these areas. This ability is what distinguishes it from the Gurgaons and Navi Mumbais. Essentially the real estate companies will be offered to join in post the development of the full infrastructure services in these areas,which means the price they will have to pay will be high. Both too have taken time to take off,which has helped especially DMIC take the correct call. It is not often the Indian government can be credited with following through policies that make sense and are sensible. These are on the tracks.
Subhomoy is a deputy editor based in New Delhi.
subhomoy.bhattacharjee@expressindia.com
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