The proposal will be taken up by the CoS at its next meeting shortly, following which the railways hopes to get the cabinet approval within the next month. A senior railway official told The Financial Express that depending on the performance of the corporation in the initial three years, government will divest equity in a phased manner. In the first stage, government will hold 100 per cent equity in the corporation, followed by 51 per cent in the second stage. "In the third stage, depending on the government policy, the corporation will divest its stake even below 51 per cent", saidthe official. The corporation will be registered as a public limited company with the Registrar of Companies (RoC) early next year and be operational from the next financial year. It will have an authorised capital of Rs 50 crore with a paid up capital of Rs 20 crore, said the official. The corporation has already been allocated an initial budget of Rs 5 crore by the Parliament, he added.

The official said that once the corporation starts making profits, the railway could also go in for a joint venture with either the private sector or with government corporations such as the Indian Tourism Development Corporation (ITDC).