Urban Metrorail Funding and Financing in India: Empirical Analysis of Potential Innovative Options

Funding urban metros through limited public resources is well documented as inadequate and constrained, and post the pandemic, these challenges may have increased manifold for the government authorities. India’s evolving economy poses a five-year investment task valued at around $78.43 billion for the centrally governed urban metrorail sector. Financing needs for these 50 metrorails combined with 2021–22 budgetary announcements on Metrolite and MetroNeo in Tier II and Tier I periphery areas of cities are colossal and largely proposed from traditional monetary sources. Given the uncertainty around public sources, a sustained financial mechanism is required for funding this development in the country. Thereby, there is an emergent need to examine different funding and financing sources in the Indian metrorail sector and forms the baseline research gap for assessment in this paper. Authors in particular examine potential of innovative options within the transport infrastructure financing framework for metrorails. Analysis involves addressing innovation needs, measures, and approaches that can motivate innovative financing solutions and refer to key challenges. Using online variant of Delphi technique survey, experts’ consenting views were collated over two rounds and analysed for building qualitative ex-ante options. Few challenges recorded were fiscal discipline improvements, funding options inadequacy, strengthening institutional capacities, absence of anchor leadership, non-availability of long-term finance, etc. Few funding tools such as raising bonds, optimum use of land value capture alongside structural reforms were identified. Assessment from surveys concluded a need for stakeholder wide innovations in the financing lifecycle for metrorails.