Budget 2017: Railways gets Rs 1.31 lakh crore for development

The Union Budget pegged the Indian Railways’ capital expenditure for 2017-18 at Rs 1.31 lakh crore, the highest ever in the history of the national transporter. It will receive Rs 55,000 crore from the finance ministry as gross budgetary support.

The railways will raise the rest from other sources. “We have the highest outlay for the next financial year. The funds would be utilised for acquiring new coaches, building new tracks and electrification,” said Mohd Jamshed, member-traffic at the Railway Board.

The railways will get Rs 18,000 crore from Life Insurance Corporation as loans, while Indian Railway Finance Corporation, the railway ministry’s dedicated financing arm, will issue bonds to raise nearly Rs 22,000 crore. The rest will be mobilised through internal resources and public private partnerships.

“This capex of Rs 1.31 lakh crore is very much in keeping with the railway minister’s vision of (spending) close to Rs 8 lakh crore over the next five years,” said Vinayak Chatterjee, cofounder of Feedback Infra, an infrastructure services firm. The railways has several joint ventures with state governments. Funds spent through these ventures by state governments are accounted under public-private partnerships (PPP).





The railways will raise Rs 22,000 crore from PPPs, including its joint ventures with state governments and public sector units. Internal accruals are estimated to bring in Rs 14,000 crore. For the financial year 2017-18, the railways plans to spend Rs 21,185.49 crore on construction of new lines and Rs 650 crore on plant and machinery, among other expenditures. It plans to also invest more than Rs 700 crore in public sector units, and Rs 16,790 crore in special purpose vehicles and JVs.

Finance minister Arun Jaitley has proposed to create a rail safety fund, Rashtriya Rail Sanraksha Kosh, with a corpus of Rs 1 lakh crore over five years. It will draw 75% of the funds from the finance ministry while railways will raise the rest on its own. The finance ministry has already given Rs 15,000 crore to the fund.

The railways plans to use funds also for constructing freight corridors, improving connectivity in Kashmir and the Northeast, upgrading signalling, redeveloping stations, improving passenger amenities, acquiring rolling stock and expanding critical freight lines near coal fields and ports. The railways, however, will still be responsible for its losses and all expenditure including salaries and pensions. All the burden will have to be met on its own, through revenue from carrying freight and passengers.

The rail ministry’s budgeted plan outlay has gone up drastically in the past two years. It went up to a little over Rs 1 lakh crore in 2015-16 from Rs 65,000 crore in 2014-15 and to Rs 1.21 lakh crore in the current financial year.