NEW DELHI: A day after approving big ticket FDI in railways and defence, the government today said foreign investment in railways will help in strengthening infrastructure and asserted security will not be compromised.
Commerce and Industry Minister Nirmala Sitharaman told PTI that the Cabinet had taken the decision to ease the FDI policy in those areas of railways that are not going to affect security and sovereign authority of the sector.
“So, overall the control would be with the railways, ownership being with the railways and essential operations being kept with in the railways. Getting FDI, we thought would (help) in speeding up lots of handicaps which the railways is facing because they are unable to finance that and therefore it was taken as a conscious decision,” she said.
Moving ahead with the economic reforms, the Cabinet yesterday cleared the long-delayed proposal of raising FDI limit in defence to 49 per cent and fully opened up the railway infrastructure segment, like high speed trains, for foreign investment.
The minister said all security-related concerns raised by the Home Ministry have been taken care of by the policy.
“There are factors of security, factors of our concern which will be kept in mind (before clearing any proposal). It is not going to be a simple walk in, put the money and build. No. Obviously there are processes, there are ministries which look into it,” she said.
The Home Ministry had raised concerns with regard to rail infrastructure in border areas, particularly investments proposals from China.
According to estimates, the Indian Railways is facing a cash crunch of around Rs 29,000 crore and allowing of FDI will help mop up resources.
About FDI in defence sector, the minister said control will be there in the hands of Indians.In case, proprietary and latest technology are brought in with condition of control, that proposal will be cleared by the Cabinet.
“If it is state-of-the-art or there are going to be high technology involved, the Cabinet can always take a call that time but that is going to be an exceptional case rather than a regular flow of investment,” she said.