BUDGET - BMR Advisors

RAILWAYSThe Indian Railways is the world’s second largest network in theworld and has been contributing to the industrial and economicdevelopment of the country for decades. Freight and passengertraffic are the two major segments of the Railways. Within thefreight, bulk traffic accounts for nearly 84 percent of the revenueearning freight traffic, of which 43 percent is coal.Developments during the yearThe year 2007 has been significant for the Indian Railways inachieving goals and targets. During FY 2007-08 (April-November), Indian Railways carried 501.46 MMT of revenueearning freight. The freight carried shows an increase of 37.07MMT over the freight traffic of 464.39 MMT carried during thecorresponding period last year, registering an increase of 7.98percent.Policy developmentsIn order to develop the wagon leasing market, a new wagonleasing policy has been prepared under which, rail customersand container operators will be able to take wagons on lease.For getting registered under the scheme, wagon leasingcompanies should have minimum net worth of Rs 2.5 billion andwill have a deposit Rs. 50 million as registration fee. Registrationwill be valid for 20 years and will be renewable for another 10years on rendering satisfactory services. Leasing companieshave been give full rights to choose or change their lessees.These companies will lease out special purpose wagons, highcapacity wagons and container wagons.OutlookProjected investments in the Railway sector duringthe 11th PlanDuring the 10th Plan, the total investment outlay in the Railwayssector was to the tune of Rs 1,196 billion (Approximately USD 29billion). During the 11th Plan, a huge impetus has given toinvestments in Railways sector.In a bid to make Indian Railways the world’s number one railwayindiaBUDGET200837