The Union Cabinet may soon consider the Finance Ministry's proposal of reducing the Indian Railways' land licensing fee from six per cent to three per cent of the market value of the land.
Stating this, government sources told Business Today TV that the move would help facilitate the privatisation of the state-run Container Corporation of India Ltd (Concor).
In 2021, the Ministry of Railways had circulated a draft cabinet note on the land lease policy, suggesting a reduction in the land licensing fee to two per cent. "The Finance Ministry had also approved this last year. We are now expecting cabinet approval later this month”, the sources added.
In April 2020, the Railways had notified a land licensing fee regime for industrial use of its land and extended it to Concor. Until then, Concor had been paying land lease rentals to the transporter on a per-container (20-feet equivalent unit container) basis, which entailed a lower outgo.
The licensing fee is an annual charge levied by Indian Railways for use of land owned by the national transporter.
The Union Cabinet in November 2019 had approved the disinvestment of government's 30.8 per cent shareholding in the company, along with transfer of management control. Subsequently, in 2020 the new land licensing fee policy added costs for Concor, and an unfavourable atmosphere for investors to acquire.