Prabhu tones down on seeking Budget support for Railways

 Railway Minister Suresh Prabhu on Thursday depended heavily on raising domestic and international debt and borrowings to garner additional resources for railways rather than only relying on the budgetary support from the finance Ministry.

Loans ranging from multilateral development banks, insurance and pension funds and monetising of railway assets were some of the ideas floated by the minister for raising resources which he called “historic”.

“Business as usual of asking for budgetary support from the Finance Ministry is neither sustainable nor necessary,” Prabhu said, as his Ministry sought a Gross Budgetary Support (GBS) of Rs 40,000 crore for 2015-16.

The market borrowing was projected at Rs 17,655 crore and Rs 5,781 crore was expected to come from PPP for the railways that proposed a Plan outlay of Rs 1,00,011 crore, a 52 per cent increase over revised estimates of last year.
Prabhu said while the budgetary support has been increased progressively over the years, it has not been adequate to realistically fund the large shelf of projects that are in the pipeline.

He said that many of the projects related to decongestion in heavy traffic sections and were remunerative. Such projects could be taken to accelerate completion by tapping market funding from institutional finance agencies and multilateral lending.

Over 100 projects

The minister said that more than 100 projects valuing more than Rs 1 lakh crore had been identified to be financed through extra budgetary resource.
Prabhu expressed confidence that institutions like LIC, pension funds and sovereign funds could provide long term debt for railways.

“The LIC, pension fund and sovereign wealth funds don’t insist on repayment of loans in short term, rather they want us to pay in over 30 years,” he said, adding loan was the way forward for infrastructure development.

“Countries like the US, China and Europe have taken loans for development of their infrastructure,” Prabhu said.

The minister also stressed that the Railways would go in for monetising their resources rather than selling their assets.