 "Rail Budget 2016: Plan size increased by Rs 21,000 cr")
Railway Minister Suresh Prabhu on Thursday expressed hope that a higher share from the road safety fund and institutional finance, a source that has been tapped vigorously in the last few years, would fund his hefty 21 per cent increase in the Plan outlay for FY17 to Rs 1,21,000 crore.
Prabhu has an ambitious plan of doubling railway tracks, improving traffic facilities, electrification of lines and better passenger amenities. The outlay for electrification has been raised by 25 per cent.
Read our full coverage on Union Budget 2016
Prabhu has an ambitious plan of doubling railway tracks, improving traffic facilities, electrification of lines and better passenger amenities. The outlay for electrification has been raised by 25 per cent.
Read our full coverage on Union Budget 2016
Read more from our special coverage on "RAIL BUDGET 2016"
He expects Rail Safety Fund, a share of the cess collected on diesel sales across the country, would go up by 330 per cent to Rs 10,780 crore in 2016-17. Considering that so far Railways’ share in the diesel cess has hovered around Rs 2,500 crore per annum, the target looks quite ambitious.
GETTING ON TRACK?
Prabhu hoped for a massive jump in institutional finance, which included tapping pension or insurance funds. In FY17, Prabhu expects around Rs 21,000 crore to come from institutional finance, an increase of almost 119 per cent from the Revised Estimates of 2015-16.
In the absence of a clear road map on raising such resources, officials said this could also come from the Rs 1,05,000 crore investment promised by the Life Insurance Corporation (LIC) over the next five years.
“The capex of Rs 1,21,000 crore should provide boost to investment in sectors such as cement, steel, information technology and telecom hardware. This may augur well for investment focus in the Union Budget, too,” rating agency CRISIL said in a note.
The Plan outlay also reflects the falling reliance of the Railways on Gross Budgetary Support. In FY17, Indian Railways hopes to get a budgetary support of Rs 45,000 crore from the finance ministry, which is only 30.4 per cent more than the Revised Estimates of 2015-16.
The Revised Estimates were almost Rs 8,000 crore less than the Budget Estimates of 2015-16, showing the massive cut in allocation by the finance ministry. This could also be seen as a sign of things to come in the Union Budget 2016-17, to be tabled in Parliament on Monday.
Gross Budgetary Support of 2015-16 shows it was less than 10 per cent more than the actual allocation of 2014-15. In other words, since 2014-15, there has not been a tangible increase in Budgetary Support for Indian Railways.
Last year, the Railways had identified over 100 large projects valuing about Rs 1 lakh crore to be funded through extra-budgetary resources, including institutional finance.
“The capex of Rs 1,21,000 crore would be implemented through joint ventures with states and new frameworks for PPP,” Prabhu said in his Budget speech.
Budget documents show that through the public-private partnership route, much can be attained in 2016-17. Against the Budget Estimates of Rs 5,781 crore in 2015-16, Railways earned almost 371 per cent more at Rs 27,269 crore.
