New Delhi: Indian Railways’ has to rely on borrowings to fund its capital investments and such a strategy will not lead the public transporter into a debt trap, Suresh Prabhu, Union Railways Minister, has said.
“All our efforts including borrowing are to improve the health of Railways. By borrowing, we are not putting Railways to danger”, Prabhu said in Lok Sabha replying to the discussions on the demand for grants for Railways for 2015-16.
Prabhu highlighted that most of the advanced railway networks — Japan, Germany, China — had all borrowed money to build infrastructure.
The Lok Sabha later passed through a voice vote the demands for grants for Railways for 2015-16. The relevant appropriation Bills were also introduced and passed.
Prabhu said that Railways had to look at borrowings as its internal revenue generation was not adequate to entirely fund the required capital investments.
“One can generate more revenues only when we make more investments. To make more investments, the internal revenue generation is not adequate and so we are looking to borrow”, he told the Lok Sabha.
During his reply, Prabhu almost ran into some controversy when he remarked that he was confused by the recent report of the Standing Committee on Railways.
At one side, the Standing Committee wanted Railways to undertake projects looking at the bankability. Somewhere else in the same report, the Standing Committee is said to have urged Railways to undertake socially important projects.
However, Prabhu later assured the members of the lower house that all the suggestions of the Standing Committee would be duly considered by his Ministry (Railways).
In his reply, Prabhu also said that efforts are on to set up state-specific Special Purpose Vehicles (SPVs) which could then undertake intra-State projects and the revenues could then flow into these SPVs.
Mallikarjun Kharge, former Railways Minister and Leader of Congress in Lok Sabha, said that the standing committee report was “not politically motivated”.