The Indian railways will spend a whopping $95 billion (over Rs. 6.34 lakh crore) over the next five years on ramping up its infrastructure. Morgan Stanley Research’s Industrial Analyst Akshay Soni, who has authored a report on the railways, believes that the “historical lack of delivery in the railways creates scepticism, but this time could be different’’.
The railways suffered in the past due to “underinvestment and poor policies”. Budget allocation in rail, at just 20 per cent of roads, has been significantly lower than global standards and over 60 per cent of the railways’ funds are being allocated to projects with a negative rate of return, Soni’s report points out. It adds that by spend $95 billion on railways over the next 5 years, India would move towards achieving a 12 per cent GDP growth between 2014-15 ando 2018-19.
“Of course, the ensuing productivity gains will improve India’s manufacturing competitiveness and the lower CO2 emissions on freight would help India meet its 2030 emission targets,” it added.