Elucidate the Government policy on FDI in Indian Railways. To what extent, liberalization in this policy is in favour of the Indian Railways? Discuss keeping view the social impacts.
Currently, FDI up to 100% is allowed in 17 segments of Indian railways such as Railways electrification, Signaling systems, Freight terminals etc but, FDI continues to remain prohibited in Railway Operations.
To meet the budget deficit of railways in developing high class infrastructure to cater to the future needs; FDI is a better option as; it could not be fulfilled through domestic means. But, the move has to be cautious in nature because of the security risk involved under various strategic areas. Furthermore, for better results FDI should be under both; financial and technological segments.