Budget 2017: Railway Minister Suresh Prabhu on Tuesday said that the railways need high budgetary support in FY18 and FM Arun Jaitley has been extremely supportive about the requirement of funds.
Budget 2017: Railway Minister Suresh Prabhu on Tuesday told CNBC-TV18 that the railways need high budgetary support in FY18 and FM Arun Jaitley has been extremely supportive about the requirement of funds. Last week, the business channel reported that the Indian Railways is unlikely to get as much gross budgetary support as it is seeking from the Finance Ministry. According to the channel’s report, Sources in the government said that Indian Railways is demanding around Rs 60,000 crore, but the Finance Ministry is likely to give only Rs 48,000 crore to Rs 50,000 crore.
The Railways is looking at close to Rs 1.35 lakh crore of financial outlay for FY18 and plans to tap extra budgetary resources to stick to the FY18 outlay. The Railway Ministry may raise money via IRFC (Indian Railways Finance Corporation) bonds, LIC loans and PPPs.
This is the first time in 92 years that the Railway Budget will be a part of the main Union Budget, and will not be presented separately by the Railway Minister. In a radical reform, earlier this year, Finance Minister Arun Jaitley accepted Railway Minister Suresh Prabhu’s proposal to merge the two budgets. The move to discard the age-old practice of a separate Rail Budget is part of the Modi government’s reform agenda. The most important thing is that after the merger, the Railways would not have to pay the dividend to the central government and its capital at charge would stand to be wiped off. The Railways used to pay up to Rs 10,000 crore as dividend to the government.
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Indian Railways is a mammoth organisation that needs a huge flow of funds to keep functioning efficiently. In view of the recent train accidents, focus is also on how much money is dedicated to upgrade existing railway infrastructure.
Experts are of the view that multiple things require attention when it comes to making rail travel safer. Abhaya Agarwal, Partner and PPP leader, Ernst Young India, believes that Indian Railways should spend at least Rs 50,000 crore every year to upgrade infrastructure. “There is immediate need to remove the dust on the Sam Pitroda report (on railway modernisation) and create a time bound plan for investment in infrastructure and safety. That should be the main focus area,” he tells FE Online.