Metro Rail Expansion

The current regime under the leadership of Narendra Modi has laid down its goal of metro rail projects covering as many as 50 cities in India (Haider 2018). This has been followed by the sanctioning of about six new metro rail projects, in addition to some of the operational metro projects, across different Indian cities in 2018 itself (Dash 2018). Amidst the proposals for new metro rail projects and the existing metro projects that are either operational or at the construction stage, the question of financial viability of metro systems is of core concern. While so far the budgetary support from the government has provided for a significant share of investments for most metro projects in India, recent policy shifts in India indicate a move towards reduction in it and a thrust on greater involvement of private actors in financing and developing these projects. However, private participation in the development of metro projects comes at its own cost. Private entities are likely to take up metro construction and implementation activities only if they are able to generate profits in return for their investments. In this context, it appears that under the current policy framework, the expansion of metro rail projects across the country will only accelerate the process of conversion of land in urban and peri-urban areas for consumer-oriented use.

Viability of Metro Projects