Govt likely to share burden of further Indian Railways borrowing

Setting its eyes on infrastructure development, the Union Ministry of Finance has asked the railways to raise borrowings, with the assurance that it will pay the principal amount. The railways will have to pay the interest.

According to sources, a final call on this would be taken when the national carrier asks for additional sums to be allotted to it in the form of Gross Budgetary Support (GBS), or when it appeals to the finance ministry to repay both the principal and the interest. “We are in talks with the department of expenditure to take a call on this soon. It needs to be seen what their decision would be after the issue was discussed at the economy review meeting chaired by Prime Minister Narendra Modi on September 15,” said an official source.

graph In the Union Budget, the government had cut the budgetary support for the railways for 2017-18 by Rs 150 billion, and provisioned Rs 531 billion for 2018-19, compared to over Rs 550 billion in the budget for 2016-17. This is expected to create a shortage of at least Rs 2 trillion in the mega investment plan of Rs 8.56 trillion, drawn up by the Narendra Modi-led NDA government for the period between 2015 and 2019.