Indian Railways to Fall Short of Asset Monetisation Target by ₹1.23 Lakh Crore

Regulatory Hurdles, Lack of Private Interest, and Structural Issues Hamper Progress

March 18, 2025 – New Delhi: Indian Railways is set to fall ₹1.23 lakh crore short of its ₹1.52 lakh crore asset monetisation target under the National Monetisation Pipeline (NMP) for FY22-25, raising concerns over the government’s ambitious revenue-generation plans.

Railways’ Monetisation Falls Far Behind Target

According to data from the Railway Ministry and NITI Aayog, Indian Railways has raised only ₹28,717 crore so far, significantly below expectations. The Ministry of Finance confirmed that:

• ₹20,417 crore was raised between 2021-22 and 2023-24
• ₹8,300 crore was raised in 2024-25, bringing the total to ₹28,717 crore over four years

Despite the government’s push for asset monetisation across public sector undertakings (PSUs), Indian Railways’ slow progress is attributed to:

• Reluctance from the Railway Ministry to monetize key assets
• Stringent regulations that deter private participation
• Absence of an independent regulatory body
• Private sector concerns over investment returns and contract security

Key Targets Under the Railways’ Monetisation Plan

The Indian Railways’ ₹1.52 lakh crore target was set under the NMP (FY22-25), which aimed to generate funds through:

• Redevelopment and monetisation of railway stations
• Privatisation of passenger train operations
• Freight terminals and land leasing

However, low investor confidence and lack of regulatory clarity have stalled progress.

Challenges in Railway Station Redevelopment

One of the biggest setbacks has been the station redevelopment program, which was expected to generate significant funds under a public-private partnership (PPP) model. However, this approach has failed to attract enough private bidders due to:

• Private investors demanding higher returns and more control over ticket pricing and train operations
• Railways’ unwillingness to relax control, making investments unattractive
• Dissolution of the Indian Railway Stations Development Corporation (IRSDC) in 2022, which had been tasked with station redevelopment

Failure of Private Train Operations to Attract Bidders

• The Railways had planned to raise ₹21,600 crore by allowing private firms to operate passenger trains.
• However, its first set of tenders in 2021 failed, leading to revised terms in 2022, which still failed to generate significant interest.
• Only two bidders—IRCTC and Megha Engineering & Infrastructures—participated at the financial bidding stage in 2021.

Market analysts believe that Indian Railways’ dual role as both a competitor and a regulator creates uncertainty for private investors.

Expert Recommendations for Boosting Private Participation

Industry experts and market analysts suggest that Indian Railways should adopt a deregulated model similar to the aviation sector:

• Instead of bidding out train operations on fixed routes, the government could auction slots and timings, allowing greater flexibility.
• Easing revenue-sharing agreements in bidding norms to encourage competition and prevent monopolization of routes.

Government’s Response and Future Outlook

Despite the slow progress, the Core Group of Secretaries on Asset Monetisation (CGAM), chaired by the Cabinet Secretary, continues to push for reforms. However, bureaucratic resistance within the Railway Ministry remains a major challenge.

As India’s railway infrastructure modernisation continues, the government may need to rethink its strategy to attract private investment and meet its ambitious asset monetisation targets.