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Despite promise of FDI and privatisation, Sensex falls nearly 600 pts to 25699 after Railway Budget

Tuesday, 8 July 2014 - 2:17pm IST | Place: Mumbai

The stock market has not reacted well to the Railway Budget by Gowda. The Sensex is down410 pts to 25699 pts. The Nifty is down 130 pts to 7662. This is the steepest fall for the market since 27 January 2014.

Among the railway stocks, the worst loser has ben Texmaco Rail down 19 percent. Other railway stocks BEML, Kalindee Rail, Titagarh wagons, ARSS Infra, kernex Micro, Stone India have all fallen around 5%. 

Apart from focusing on the commuters, The government as expected made it clear that it spends 94 paise out o every Re 1 which gives an operating ratio of 94%. This means only 6 paise is left in its pocket to invest into the railways. This means the government cannot be expected put in more money out of its own pocket and must call in private industries to help out with the investments. Gowda asked the cabinet to say an yes to his proposal of introducing foreign direct investment in railways. He said, "I seek Cabinet approval for foreign direct investment in Railways except in railway operations. The government will also look to fund future projects, including high-speed trains, via the public-private-partnership mode. We also need to leverage railway PSU resources. We will also look for ways to monetize Railways land."

Also for building escalators, life, providing safe drinking water and clean toilets in the stations, the minister asked the private sector, corporate, NGos to come forward to help out the government. The minister has also called for a restructuring of the railway board.

Sachin Bhanushali, President, Gateway Rail Freight and Umesh Chaudhury, vice chairman of Titagarh Wagons welcomes the move by the government to restructure the board. Four experts on CNBC TV18 gave the Budget a score of 7 out of 10. Even Narendra Modi said this was the most holistic Railway Budget in Modern India. That is a much better assessment than the market is ready to concede.

 

 


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