LIC to invest Rs150,000 crore in Railways over next 5 years
11 Mar 2015
Life Insurance Corporation of India (LIC) has committed to investing about Rs150,000 crore in various commercial projects of Indian Railways over the next five years, finance minister Arun Jaitley said, pointing to a dearth of Budgetary resources to finance railway projects.
The state-run insurance major will make the investment through subscription to bonds issued by various railway entities such as Indian Railways Finance Corporation (IRFC), beginning next fiscal.
The Indian Railways, one of the largest railway networks in the world, needs huge amounts for development of various commercially viable projects.
"LIC has taken the task of supporting Indian Railways... It is a commercial decision... LIC will invest Rs1,50,000 crore over a period of five years," finance minister Arun Jaitley said.
This would mean the Railways would be buying Rs30,000 crore worth of bonds issued by various railway entities such as Indian Railways Finance Corporation (IRFC), beginning next fiscal.
IRFC, meanwhile, will be raising Rs2,000 crore through bonds to be issued within the next few weeks and market expects insurers and pension funds to subscribe to the bonds in the initial stages.
Railway minister Suresh Prabhu in his maiden railway budget had said that for financing remunerative projects through market borrowings, it is intended to tap low-cost long-term funds from insurance and pension funds, multi-lateral and bilateral agencies which can be serviced through incremental revenues.