Cabinet approves policy on long term leasing of Railways Land for implementing PM Gati Shakti framework

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The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the Ministry of Railway’s proposal to revise the railways’ land policy to implement PM Gati Shakti framework  (Cargo related activities, Public utilities & Railway’s exclusive use).


  1. This will help in attracting more cargo to railways, increase railways’ modal share in freight transportation thereby reducing logistics cost of the industry.
  2. This will bring more revenue to railways.
  3. This will simplify approvals for utilities as envisaged in PM Gati Shakti Programme.  This will help in development of public utilities like electricity, gas, water supply, telecom cable, sewage disposal, drains, optical fibre cables (OFC), pipelines, roads, flyovers, but terminals, regional rail transport, urban transport etc. in an integrated manner.
  4. This policy amendment will enable employment generation potential of about 1.2 lakh employment.

Financial Implications:

No additional expenditure will be incurred.  Liberalizing the land leasing policy would open avenues for all stakeholders / service providers / operators to establish more cargo related facilities and render their participation assisting in generation of additional cargo traffic and freight revenues to Railways.


This policy amendment will enable employment generation potential of about 1.2 lakh employment.


    1. The revised railways’ land policy will enable integrated development of infrastructure and more cargo terminals.
    2. It provides for long term leasing of railway land for cargo related activities for a period up-to 35 years @ 1.5% of market value of land per annum.
    3. The existing entities using railway land for cargo terminals will have the option to switch to the new policy regime after transparent and competitive bidding process.
    4. 300 PM Gati Shakti Cargo Terminals would be developed over next five years and about 1.2 lakh employment would be generated.
    5. This will increase modal share of rail in freight transportation and reduce overall logistics cost in the country.
    6. The policy also simplifies Railways’ land use and Right of Way (ROW) for integrated development of public service utilities like electricity, gas, water supply, sewage disposal, urban transport etc by providing railway land @ 1.5% of market value of land per annum.
    7. For Optical Fibre Cables (OFC) and other smaller diameter underground utilities, a one-time fee of Rs. 1000/- will be charged for crossing railway track.
    8. The policy provides for use of railway land at nominal cost for setting up of solar plants on railway land.
    9. The policy also encourages development of social infrastructure (such as hospitals through PPP and schools through Kendriya Vidyalaya Sangthan) on railway land at a nominal annual fee of Rupee 1 per sqm. per annum.

Implementation strategy and target:

    1. Comprehensive Policy document will be framed and implemented within 90 days of cabinet approval.
    2. The approvals for setting up utilities envisaged under PM Gati Shakti Programme will be simplified.
    3. 300 PM Gati Shakti Cargo Terminals would be developed over the next five years.


Railways’ organization and network spans the entire country.  However, railways with its existing land policies could not integrate well with other modes of infrastructure.  Thus, a need was felt to streamline and simplify Railway’s land lese policy to enable faster integrated planning and development of infrastructure across the country under PM Gati Shakti framework.

Extant policy permits licensing of railway land for a short period upto five years for any railway related activity.  Such short-term license period does not attract any serious investors for creating multi-modal cargo hubs.  Long term leasing of railway land upto 35 years is allowed for leasing government land mainly to Public Sector Undertakings (PSUs), thereby limiting the scope of investments in cargo terminals.  Since rail is an efficient mode of transport it is essential to more freight by rail so as to reduce the logistics cost of the industry.  To enhance the modal share of rail in freight transportation need has been felt to modify the land leasing policy to encourage development of more cargo terminals.