BackRailways plans to borrow Rs50,000 cr in FY13
Railways plans to borrow Rs50,000 cr in FY13
Premium
New Delhi: Union railway ministry plans to borrow Rs50,000 crore ($10.02 billion) from the market through the Indian Railway Finance Corporation (IRFC) in the fiscal year 2012-13, railway minister Dinesh Trivedi said on Wednesday.
The railway budget precedes the Union budget, to be presented by finance minister Pranab Mukherjee on Friday, which is expected to push fiscal consolidation amid slowing economic growth and high inflation.
India’s railway network is one of the world’s largest, but years of low investment and populist policies have crimped growth and hindered private investment in a sector seen as crucial to the country’s economic expansion.
“There has been considerable criticism of Indian Railways in regards to only partial implementation or sometimes no implementation of the recommendation of several committees set up in the past," Trivedi said.
“We need to have a system that delivers," he said.
Watch Video
Vinay Mittal talks about the rationale behind using PPP models and the need to raise ticket prices
The railway ministry planned to add 700 kilometres of new rail lines to its network in the fiscal year starting in April, Trivedi said.
Successive railway ministers have belonged to powerful regional allies of the ruling party in New Delhi, who have tended to subsidise passenger fares at the expense of freight traffic, making goods transport expensive and slow.
Passenger fares were last raised in the 2003-04 budget. The refusal to raise fares has strained the ministry’s finances, which in turn has crimped the amount of money available to lay new tracks and modernize signaling.
Clogged freight lines, slow delivery times and overcrowded ports have dented Indian companies’ competitiveness and slowed the pace at which crucial commodities such as coal are transported -- further aggravating power shortages.
Also Read | Railway Budget highlights | Fares hiked across all classes
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
