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Modi's plan to revamp railways faces major obstacles

Monday, February 23, 2015

Significance

This priority is reflected in the government's economic agenda where the railways figure prominently. Besides proposals for new lines, metro systems and even bullet trains, Prime Minister Narendra Modi is promoting a special freight corridor spanning the entire subcontinent. Designed to encourage technological innovation, develop rural areas and speed up traffic, the corridor seeks 90 billion dollars in new investment.

Impacts

  • Railway expansion would alleviate coal feedstock shortages, reducing the impact of power cuts on growth.
  • Additional Japanese infrastructure investment will aid Tokyo's agenda of countering China's financial sway in developing Asia.
  • Frequent Maoist attacks on railways could dampen investor appetite, but this risk is concentrated in eastern and central India.
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