Jaitley may push Railway capex to Rs 1.50 lakh crore
Indian Railways could get a bonanza from the Centre to put its house in order and retrieve its lost credibility, which has taken a beating on account of series of accidents in the past few months.
Government sources privy to the development said that central gross budgetary support (GBS) for railways could see a reasonable increase in the upcoming Union budget to aid the transporter’s plan to increase capital spend on projects that strengthens safety and security feature of its network and focuses on consumer experience.
As it spurs growth by scaling up public spending, the government is likely to substantially increase Indian Railways’ annual capital expenditure (capex) up to Rs 1.50 lakh crore in FY18, up about 20 per cent over the current financial year.
This will be the highest-ever capital outlay for the public transporter, affirming the role of the public transporter in boosting the economy.
A major chunk of the outlay will come from the market via institutional and multilateral borrowings, but the Centre would also pump more budgetary money as railways’ surplus from internal generation is expected to be a meagre Rs 8,500 crore in
FY 17, lower than the previous financial year.
Budgetary support for the next fiscal could be Rs 50,000 crore. The GBS for railways is about Rs 45,000 crore for the current fiscal.
Government sources said that with Centre expected to generate a big surplus of funds post-demonetisation and no pressure to cut down on expenditure to maintain fiscal deficit, funds would be made available to the railways to bolster its route network and capacity augmentation.
Ending a 92-year-old tradition, the rail budget, which was earlier presented separately, has now been merged with the Union budget.
Besides, the Union budget has this time been advanced for speedier implementation of projects.
Claiming that the budgeted plan outlay for the current fiscal would be achieved, a senior official made a strong case for higher spending target for next year.
“We expect our plan outlay would be pegged at Rs 1.3-1.5 lakh crore. In the first nine months of FY17, we have already spent Rs 68,059 crore on capital expenditure compared to Rs 53,118 crore in the corresponding period last year,” he said.
It may be noted that the spending of Rs 68,059 crore in the nine months accounts for only 56 per cent of the budgeted outlay of Rs 1,21,000 crore for the full year.
It looks very difficult for railways to achieve its annual target with almost half the task is needed to be completed in the January-March period.
Seeking to make up for years of empathy towards rail infrastructure, the railways has decided to invest a whooping Rs 8.65 lakh crore in five years. It has been earmarking higher spending targets for the last two consecutive Rail budgets.