Railways likely to get a booster shot in budget
NEW DELHI: The budget allocation for the railways is set to hit a record level next fiscal as the government gears up to support a major makeover for the national transporter.
Budget 2022-23 is likely to raise the plan size for Indian Railways by up to 20% of FY22 budget estimates, which would take up its allocations to close to ₹2.5 trillion, two people aware of the development said.
The railway ministry sought an increase in its plan capex as it has set its eyes on long-term infrastructure projects of freight corridors and speedier trains while modernizing the fleet with the introduction of new-age trains, wagons and locos. It is also carrying out electrification of all routes and overhauling the signalling systems to make train journeys smoother and safer.
“Higher plan capex allocation for railways is the need of the hour as the national transporter reaches a critical stage of implementing key infrastructure projects. The government supported it with a record rise in gross budgetary support last year, and the expectation is that this level would be breached in FY23,” said a former railway board chairman asking not to be named. Last year’s allocation of ₹2.15 lakh crore too was the highest ever for the railways— with ₹7,500 crore coming from internal resources, ₹1 trillion from extra-budgetary resources and another ₹1.07 lakh crore as gross budgetary support.
Gross budgetary support is the amount that Indian Railways receives from the government’s general budget.
The plan is to keep Indian Railways adequately funded to build new infrastructure.
The people cited above said that out of the proposed ₹2.5 lakh crore capex plan, a higher ₹1.25 lakh crore may come as gross budgetary support (GBS) from the Centre. Also, railways’ earnings from PSUS may help it raise extra-budgetary resources.
To be sure, the GBS remained at much lower levels at ₹70,250 crore in FY21, ₹69,967 crore in FY20 and ₹55,088 crore in FY19.
Last year, over 90% of gross budgetary support went into capital expenditure.