What is the new leasing period for railroad land under the revised policy?

The leasing period has been extended from 5 years to 35 years.

What is the revised interest rate for leasing railroad land?

The interest rate has been reduced to 1.5% of the market value, down from the previous 6%.

Who can lease railroad land under the new policy?

Eligible parties include shippers, logistics operators, public utilities, and institutions for social infrastructure like hospitals and schools.

How does this policy support the PM Gati Shakti initiative?

It facilitates faster and more integrated infrastructure development across the country.

What are the benefits of this policy for renewable energy projects?

The policy supports the establishment of solar power plants on railroad land.

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Making India's Infrastructure Better: The New Railway Land Leasing Rules

Neha Gupta

Author

Updated: 28-01-2025 at 6:19 AM

Making India's Infrastructure Better: The New Railway Land Leasing Rules

In a major step towards accelerating infrastructure development in India, the Union Cabinet recently approved a revised policy for long-term leasing of land by railroads.The plan is an important step towards making railroads a major contributor to the economy.

Under the decision, railroad land can be leased for a longer period of 35 years, instead of the current 5 years, and the interest rate on the lease of such land will be reduced to 1.5% of the market value, instead of the current 6%.

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What Is The Land Leasing Policy?

The new policy on leasing railroad land approved by the Union Cabinet is a major change from its predecessor. According to it, the permissible period for leasing out railroad land has been extended from 5 years to 35 years. This change would allow the investor or stakeholder to make long-term, substantial investments in the leased land.

In addition, the annual rent has been reduced from 6 of the market value to just 1.5%. This change makes leasing railroad land more attractive and accessible to stakeholders from various industries, including freight companies, public utilities and renewable energy.

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Benefits Of The Land Leasing Policy

It is already evident from the new railway land leasing policy that both governments, as well as stakeholders, will be highly benefited.

Firstly, it will enable faster and more integrated planning and construction of infrastructure across the country. The policy is in line with the government’s ambitious PM Gati Shakti initiative. Under the new policy, significantly longer lease terms and more favourable lease rates than before will be possible.
According to the report, the policy will also allow the development of other social infrastructure, including hospitals and schools on railway land, which is needed in many parts of the country.
The policy will also benefit stakeholders by supporting the realisation of solar power plants on railway land.

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Eligibility Criteria: Who Can Apply for the Land Leasing Policy?

The railway land leasing policy is one embraced by all parties, from commercial to public utilities and providers of social infrastructure.

The regulation stipulates that shippers and other operators of logistics, warehousing or multimodal transport services can lease land for 35 years.
Public institutions such as electricity and gas supply companies are also encouraged to lease railroad land for their development projects.
Railroad land can be leased for various forms of public facilities such as hospitals or schools, which are essential in underserved areas. In this way, we seek to alleviate poverty through the provision of community infrastructure.
This policy also gives private companies a free hand to create such green spaces on railroad land. It is in line with the state’s overall efforts towards clean energy and sustainable society.

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How to Apply for the Land Leasing Policy: A Step-by-Step Guide

The procedure in question, delays have been held by provinces and cities governments office systems, to eliminate intermediaries in order to streamline things. Here’s an example of how it works

Find Suitable Land: Based on the project requirements and the existence of suitable land with facilities such as water supply, electricity connection, etc., the relevant party should first find the actual railroad land.
Submit an Application: A formal application must be submitted to the relevant railroad authority with details of the proposed project, land requirements and use of the leased land.
Evaluation and Approval by Railway Authority: If the railroad authority approves the application, it will initiate negotiations on the lease agreements
Negotiate and Sign Lease Agreement: The applicant and the railroad authority will negotiate the terms and conditions associated with the lease agreement, including the lease term to be paid and other relevant provisions.
Lease Performance: After the lease agreement has been signed, Once all the formalities are complete, he or she can immediately proceed to develop and use the leased land of railways according to the agreed terms.

6. Monitoring implementation:” The railway will closely monitor the fulfilment of the conditions in the lease agreements and ensure that the leased land is used for the desired purpose.

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Conclusion

The Indian government’s new policy of leasing out railroad land is an important step towards making better use of the country’s infrastructure potential. With longer leases, cheaper rentals and simpler procedures, it is expected to attract a variety of investors and stakeholders who can undertake transformational projects on railroad land. ”With this arrangement, it is possible that this policy will usher in a new era of integrated, sustainable and future-ready infrastructure in India.

To read more about railway land leasing, click here for the official press release."

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