Indian Railways capex at 64% of annual target at January-end

Capital expenditure by the Indian Railways, which was languishing at very low levels in April-July 2020, has picked up pace since. Around Rs 1,03,245 crore or 64% of the FY21 target has been spend till January-end, according to official data. The national transporter received an outlay for capex of Rs 1.61 lakh crore in Budget 2020-21. In April-January last year, IR’s capex was to the tune of Rs 1,08,933 crore.

Railways has lined up an ambitious plan for implementation of mega infrastructure projects and safety-related works which will need to be bankrolled by an increased capital expenditure. Experts are, therefore, looking at an increased allocation as compared to last year in the Union Budget 2021-22 to execute the infrastructure projects and works.

According to Jagannrayan Padmanabhan, director, transport, logistics at Crisil Infrastructure Advisory, the capex may rise as much as 8-10 % over last time. “The capex spend will go into dedicated freight corridors, doubling of track and improvement in safety,” says Padmanbhan.

The Railways’ expectation of capex in 2021-22 is in the range of Rs 1.70-1.81 lakh crore, much of which will go into execution of projects outlined in the National Railway Plan till 2024. These include new train sets for faster connectivity on new routes, expansion of railway infrastructure for better connectivity in north-eastern states, electrification of the entire broad-gauge network to be completed by 2023-24, induction of latest technology for signalling & telecommunication system and green energy initiatives.

The Railways also expects work to start on projects worth Rs 1.5 lakh crore, which have been stuck due to the instructions issued by the Railway Board to zonal officers in July 2020 to rationalise expenditure. The instructions followed a finance ministry directive to put on hold infrastructure projects sanctioned in the current financial year as well as some projects approved in FY20, where work had remained stagnant.

According to a Railway source, since “the letter issued by the finance ministry was valid till this financial year, stalled projects can now go ahead in the next fiscal which would mean requirement of more funds by the Railways”.