Strapped for funds, the Indian Railways is reportedly leasing prime land in Mumbai and other metropolitan cities to private developers in a bid to boost revenue. After falling short of its first monetisation target by over ₹1.2 lakh crore, the railways now plans to unlock billions through long-term leases of up to 99 years, officials said.
The Rail Land Development Authority (RLDA), the railways’ land development arm, reportedly invited bids in September to raise at least ₹8,000 crore by leasing 10.11 hectares across four prime locations in Mumbai. These plots are part of nearly 340 hectares that RLDA plans to monetise across the country, with a phased plan to lease close to 110 hectares in Mumbai alone. Smaller parcels have been identified in New Delhi, Bengaluru, Lucknow, Gwalior, Chennai, Secunderabad, and Amritsar.
“This is part of the national policy on asset monetisation. The funds raised will be used for development and expansion of passenger infrastructure,” a Senior Railway officer said. as per Mumbai Mirror.
Since 2016, the railways has leased around 8,812 hectares of surplus land through the RLDA. As of March 2024, the railways owned 4.9 lakh hectares, of which 62,068 hectares were vacant. Of this, 43,000 hectares are under RLDA’s management, earmarked for commercial exploitation. Zonal railways identify land not expected to be needed operationally, which is then handed to RLDA for development.
Prime Sites in Mumbai for Monetisation
Mahalaxmi: A 2.66-acre plot near the station with potential FSI of 4.05. The RLDA hopes to raise nearly ₹1,000 crore through a 99-year lease. It is well-connected to Dr E Moses Road, Shakti Mill Lane, and the Science Centre Metro station. The plot is adjacent to the railway line and enjoys access to business hubs such as Lower Parel, Nariman Point, and BKC.
Parel: A 5.6-acre plot at Supari Baug, suitable for residential development with FSI 4.05. Reserve price: ₹1,734 crore. The land reportedly has a clear title and is free from encumbrances such as encroachments.
Bandra East: The largest parcel at 11.6 acres along the Western Express Highway, with FSI of 4. Reserve price: ₹5,365 crore. The site is within 300–500 metres of Bandra East station and 1.5–2 km from an upcoming Metro station, making it ideal for office and retail development.
Other locations under consideration include an 11-hectare plot near New Delhi station for five-star hotels and a 2.2-hectare plot in Chanakyapuri for commercial purposes. Approximately 90 hectares have been earmarked in Lucknow, Bareilly, and Gwalior for residential developments.
Revenue and Monetisation Aim
The central government’s National Monetisation Pipeline (NMP) for 2021–25 had set a ₹1.5 lakh crore target for the railways. However, the railways reportedly raised just ₹28,717 crore, leaving a shortfall of ₹1.23 lakh crore. The slow pace has been attributed to complex regulations, reluctance from ministry officials, and the absence of a central regulatory authority. Niti Aayog has proposed the NMP’s second phase and urged railways to address procedural bottlenecks to enhance non-fare revenue.
In FY25, the railways reported total earnings of ₹2.65 lakh crore, of which freight contributed ₹1.71 lakh crore, passenger revenue ₹75,239 crore, and non-fare revenue only ₹11,562 crore (4.5% of total earnings). Net revenue stood at ₹2,342 crore, down from ₹3,259.68 crore in FY24, with expenditures consuming nearly 99% of internal receipts.
“Indian Railways, a vital backbone of the economy, primarily generates revenue from freight and passenger operations. However, non-fare revenue generation has emerged as a crucial strategic focus,” a Niti Aayog vision document reportedly noted. Currently, 488 projects worth ₹2.92 lakh crore are ongoing nationwide.
Officials said land monetisation is expected to boost revenue, support infrastructure development, and create a commercially self-sustaining network. The railways has reportedly drawn lessons from international profitable passenger networks to ensure urban development and economic growth while leveraging surplus land.
.png)