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Railway Budget 2019: Indian Railways might see 148% hike in capex from 2014!

Railway Budget 2019 expectations: With Finance Minister Piyush Goyal all set to present the Union Budget 2019 in the Parliament tomorrow, each and every sector of the economy including Indian Railways is waiting eagerly for the expenditure allocation. The Modi government in its last budget may chart planned expenditure of around Rs 1.6 lakh crore for Indian Railways, according to an IE report. While this figure could just be 8 per cent more than last year’s Rs 1.48 lakh crore of capital expenditure target, the Centre’s constant infusion of investment to upgrade the infrastructure of Indian Railways makes it nearly 148 per cent hike in capex since the year 2014!

Under the UPA government, the last Railway Budget vote had projected capital expenditure of Rs 64,305 crore while the national transporter had managed to spend nearly Rs 59,359 crore in the fiscal year 2013-2014. According to sources quoted in the report, out of the total planned expenditure, nearly Rs 60,000 crore might be through borrowings or Extra Budgetary Resources, Institutional Financing, for which approval from the Parliament is not needed.

In this year’s Union Budget, the total borrowing for capital expenditure is likely to be pegged at around Rs 26,000 crore. Indian Railways may seek vote on account or parliamentary approval, for only 4 months of capex, which is approximately Rs 40,000 crore.

According to the report, despite having a challenging year in terms of revenue earnings, Indian Railways is likely to project a revenue target exceeding Rs 2 lakh crore for 2019-2020, the same as last year. For the financial year 2018-2019, the Operating Ratio is likely to be projected at around 95 per cent – better than last year’s 98.5 per cent, which was the worst Operating Ratio ever for Indian Railways at the end of a financial year. Just like last year, the national transporter has taken nearly Rs 10,000 crore from NTPC, one of its biggest clients, as advance freight.

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