Cabinet approved policy on leasing of railway land

Source: The post is based on the article “Cabinet approved policy on leasing of railway land” published in The Hindu on 8th September 2022

What is the News?

The Union Cabinet has approved a policy on long term leasing of Railway Land for implementing the PM Gati Shakti framework.

What is the policy on leasing railway land?

Under the policy, the railway land can be now leased for cargo-related activities for up to 35 years (as against five years earlier) at 1.5% of the market value of land per annum, down from 6% earlier.

Apart from these, land could also be used for setting up social infrastructures such as hospitals in public-private partnership (PPP) mode and for the establishment of schools through Kendriya Vidyalaya Sangathan. In these cases, the land license fee will be barely Re 1 per square meter per annum.

For Optical Fibre Cables and other smaller diameter underground utilities, a one-time fee of ₹1,000 would be charged for crossing railway tracks.

Moreover, the policy also provides for use of railway land at a nominal cost for setting up solar plants.

Note: The existing entities using railway land for cargo terminals will have the option to switch to the new policy regime after a transparent and competitive bidding process.

What is the significance of this policy?

Firstly, this is expected to enable integrated development of infrastructure and more cargo terminals, helping improve revenues for the Railways.

Secondly, this would help in attracting more cargo to the Railways and increase its modal share in freight transportation thereby reducing the logistics cost of the industry.