Poor budget backing may force rlys to skip infra plan

Written by Rajat Arora | New Delhi | Updated: Feb 26 2014, 09:42am hrs
A lower-than-expected gross budgetary support (GBS) of Rs 30,000 crore for FY15 from the finance ministry may force the railways to defer the implementation of several key projects.

Rail infrastructure projects worth Rs 1.5 lakh crore have long been stalled for want of finances. The railways had asked for separate grants for the project of national importance and dedicated freight corridor (DFC) and more funds for other routine projects for capacity expansion. But the GBS for FY15 includes Rs 6,000 crore for projects of national importance and Rs 5,000 crore for dedicated freight corridors, leaving the railways with just Rs 19,000 crore to complete more than 200 other stalled projects.

We had asked for Rs 38,000 crore as GBS and had also requested the ministry of finance to give funds for dedicated freight corridors separately as these are soft loans from Japanese agencies and World Bank, which we have to repay. How can it be called as assistance and put in the GBS, a railway board official asked.

As per the 12th plan targets, the finance ministry has to give the rail ministry Rs 40,000 every year as GBS. But the outlays have been falling short in FY13, FY14 and now, in FY15.

The railways is struggling to raise funds through internal generation as well as its passenger numbers have fallen and freight has not shown much growth due to the current economic scenario. The public-private partnership targets have also been kept very low at Rs 6,005 crore as the private sector response has been rather tepid in the past. From market borrowings through Indian Railway Finance Corporation (IRFC), the railways is raising Rs 13,800 crore in FY15, which is lesser than this year's amount. The amount raised can't be spent for project funding.

For the last two years, we have been raising Rs 15,000 crore through IRFC that is used for procuring rolling stock. This year our need for rolling stock is limited but in case need be, we will raise more amount through IRFC but it can't be spend for project funding, the railway board official added. The national transporter has kept its annual plan outlay for the next fiscal at Rs 64,300 crore .