Indian Railways will borrow Rs 20,000 crore from markets through its two companies IRFC and Rail Vikas Nigam for capital expenditure during 2016-17, a whopping 69% rise over the current fiscal year’s revised estimate.
Market borrowing, as per the revised estimate for current fiscal, has been pegged at about Rs 11,848 crore, lower than Rs 17,655 crore estimated earlier, according to the Railway Budget 2016, which was tabled by the Railway Minister Suresh Prabhu in Parliament on Thursday.
Indian Railways Finance Corporation (IRFC) will raise Rs 19,760 crore in 2016-17 for investment in rolling stock and projects while Railway Vikas Nigam Ltd (RVNL) plans to raise Rs 240 crore. During 2015-16, IRFC had raised Rs 11,591.66 crore while RVNL had mopped up Rs 255.90 crore from the market as per the revised estimate.
Besides, Railways is expecting investment through various partnership to the tune of Rs 18,340 crore.
“With great pleasure I wish to inform the House that bankable railway projects are now assured of funding and should be completed within the next three-four years,” Prabhu said in while presenting the Railway Budget 2016.
“We have introduced a new way of funding our projects through institutional financing. Life Insurance Corporation of India (LIC) has agreed to invest Rs 1.5 lakh crore over five years on extremely favourable terms. We are also looking forward to setting up a fund with multilateral assistance for financing railway projects,” he said.
Railways is expecting to mobilise Rs 20,985 crore from the institutional and multilateral funding agencies.
Commenting on Railway Budget 2016, Finance Secretary Ratan P Watal said, the increased capital spending is good for Railways and Railway Budget 2016 has significant plan outlay. “Whatever we had given in the current year, they have used it,” Watal said.