Railways Plan budget up 52%; dedicated finance cell in offing

Railway minister Suresh Prabhakar Prabhu announced in his rail budget speech today that the size of the Plan budget for Indian Railways has gone up by 52 per cent from Rs65,798 crore in 2014-15 to Rs1,00,011 crore in 2015-16.

Support from the Central government constitutes 41.6 per cent of the total Plan budget, and internal generation 17.8 per cent.

He told parliament that in view of the fact that it would be a challenging task to initiate the mobilisation of extra-budgetary resources, it is proposed to set up a financing cell in the Railway Board, which would seek advice from experts in this field.

 The railways minister informed the members 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.

Railways will create new vehicles to crowd in investment from long-term institutional investors and other partners. These may include setting up an infrastructure fund, a holding company and a Joint Venture with an existing NBFC of a PSU with IRFC, for raising long term debt from domestic as well as overseas sources, including multilateral and bilateral financial institutions that have expressed keen interest in working closely with Railways in this endeavor. Railways will monetize its assets rather than sell them, he added.