Railways needs to raise Rs40,604 cr to fund annual plan
26 Feb 2015
With a 52 per cent increase in the annual budget for 2015-16 to Rs1,00,011 crore, from Rs65,798 crore in 2014-15, the Railways will have to find additional resources to the tune of Rs40,604.47 crore to support the budget.
Railway minister Suresh Prabhakar Prabhu has announced a 52-per cent increase in the size of the 2015-16 Railway Budget to Rs1,00,011 crore, from Rs65,798 crore in 2014-15.
Of the budgeted Rs1,00,011 crore, the central government will provide 41.6 per cent (which includes Rs1,645.60 crore provided as Railway's share of diesel cess from the Central Road Fund) as annual plan support and 17.8 per cent will come through internal generation, leaving an unfunded portion of 40.6 per cent (around Rs40,604.47 crore).
The railway minister has projected market borrowing under budget estimates at Rs17,655 crore, an increase of about 46.5 per cent (Rs5,609 crore) over revised estimates for 2014-15.
Balance plan outlay includes Rs17,793 crore from internal resources and Rs5,781 crore from the private sector, through PPP.
Introducing the railway budget for 2015-16 in Parliament today, the railway minister also proposed the setting up of a financing cell in the Railway Board in view of the challenging task of mobilising extra-budgetary resources.
Railways minister Suresh Prabhu is looking to tap low-cost long-term funds from insurance and pension funds and through multilateral and bilateral funding besides market borrowing for financing remunerative projects.
The 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.
Prabhu, however, said the Railways will monetise its assets rather than sell them.
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