Nomura has predicted that Indian Railways would achieve 75% of its five-year (FY16-FY20) capex target of Rs.8.5 lakh crore and add 0.8 percentage points to India’s average GDP growth over the medium-term (5-8 years).
Stating the obvious in a recent report that chronic under-investment in the past decade has led to the railways reeling under severe capacity constraints resulting in severe congestion on its routes, the market research firm said the transporter was on the path to reverse the trend with its capex seeing a 70% jump over FY15 in FY16 and a further 21% increase in FY17.
Nomura claims that the transporter will be able to secure financing worth Rs.8.5 lakh crore through different routes. It predicts funding of Rs.2.56 lakh crore through gross budgetary support and Rs.1.5 lakh crore secured loan funding from the LIC.
