Govt okays 9 rail projects in 11 states worth ₹21K crore Sitharaman bats for MSMEs, seeks 2% RBI rate cut

NEW DELHI: Providing a big push to rail infrastructure development, the union cabinet on Wednesday cleared nine projects in 11 states costing ₹20,867.24 crore. The completion cost of these projects is estimated at ₹24,400 crore.

“This is for the first time that the government has factored in project escalation cost at the time of sanction, while eight of the projects would be financed through Extra Budgetary Resources”, chairman Railway Board (CRB) A K Mital said.

The cabinet decision is expected to help network expansion and enable the transporter to meet its 2020 targets of transporting 1.5 billion tonnes of freight. The Railways moved 1.1 billion tonnes last year and has set a target of 1.2 billion tonnes for this year.

The Railways has firmed up a ₹1.5 lakh loan agreement with the Life Insurance Corporation (LIC) to finance infrastructure development and last year it availed a loan of ₹9,000 crore from the insurance company and plans to take another ₹20,000 crore this fiscal.

Projects cleared by the cabinet include the 274-kilometer long third line from Mathura to Jhansi, which is estimated to cost ₹3,677.76 crore. NEWDELHI: Commerce and industry minister Nirmala Sitharaman on Wednesday advocated for a repo rate reduction of 200 basis points by the Reserve Bank of India to aid cash-starved MSME sector.

“I still hold that the cost of credit in India is high. Undoubtedly, particularly MSMEs which that a lot of jobs and contribute to exports... are all hard pressed for money and for them, approaching a bank is no solution because of the prevailing rate of interest. I have no hesitation to say, yes 200 bps, I would strongly recommend,” she said.

Repo rate is the rate at which banks borrow from the Central Bank. A lower repo rate translates to low interest rates on loans.

The minister, however, said that even as RBI has been cutting rates but banks have been holding and not passing on the relaxed rates. The minister also said she will take up the matter with the finance minister to direct banks to pass on benefits of the rate cuts.