'We are also looking forward to setting up a Fund with multilateral assistance for financing railway projects'
Indian Railways will borrow Rs 20,000 crore (Rs 200 billion) from markets through its two companies IRFC and Rail Vikas Nigam Ltd for capital expenditure during 2016-17, a whopping 69 per cent rise over the current fiscal year's revised estimate.
Market borrowing, as per the revised estimate for current fiscal, has been pegged at about Rs 11,848 crore (Rs 118.48 billion), lower than Rs 17,655 crore (Rs 176.55 billion) estimated earlier, according to the Railway Budget for 2016-17, which was tabled by Railway Minister Suresh Prabhu in Parliament on Thursday.
Indian Railways Finance Corporation will raise Rs 19,760 crore (Rs 197.6 billion) in 2016-17 for investment in rolling stock and projects, while RVNL plans to raise Rs 240 crore (Rs 2.4 billion).
During 2015-16, IRFC raised Rs 11,591.66 crore (Rs 115.91 billion) while RVNL mopped up Rs 255.90 crore (Rs 2.55 billion) from the market as per the revised estimate.
Besides, Railways is expecting investment through various partnerships to the tune of Rs 18,340 crore (Rs 183.4 billion).
"With great pleasure I wish to inform the House that bankable railway projects are now assured of funding and should be completed within the next 3-4 years," Prabhu said while presenting the Railway Budget.
"We have introduced a new way of funding our projects through institutional financing. LIC has agreed to invest Rs 1.5 lakh crore (Rs 1.5 trillion) over five years on extremely favourable terms.
“We are also looking forward to setting up a Fund with multilateral assistance for financing railway projects," he said.
Railways is expecting to mobilise Rs 20,985 crore (Rs 209.85 billion) from institutional and multi-lateral funding agencies.
Commenting on Rail Budget, Finance Secretary Ratan P Watal said increased capital spending good for Railways and Railway Budget has significant plan outlay.
"Whatever we had given in the current year, they have used it," Watal said.
Image: The Railway Budget documents brought in the Parliament House premises under security, in New Delhi on February 25, 2016. Photograph: Kind courtesy, Press Information Bureau