Indian Railways sought ₹79,398 crore as a grant but received partial relief instead. What does this mean for its finances and future projects?
Indian Railways had initially urged the government to convert the entire ₹79,398-crore loan—taken from the Gross Budgetary Support (GBS)—into a grant. The demand was based on concerns over the increasing interest burden and the impact on railway finances. The loan, taken for infrastructure and modernization projects, was seen as a long-term financial strain on the already stretched budget of the Railways.
A senior official stated, “The Railways plays a crucial role in national development. Given the nature of investments, we had requested that this amount be considered a grant rather than a loan.”
While the government has not fully converted the loan into a grant, it has provided some relief by adjusting repayment terms and possibly waiving a part of the interest component. This decision is expected to help Railways manage its financial obligations better without severely impacting its expansion plans.
However, a substantial part of the loan will still need to be repaid, adding pressure on revenue generation. The Railways has been working on enhancing freight earnings, increasing passenger fares on premium trains, and monetizing assets to boost its financial health.
As the Railways balances its financial challenges, this partial relief provides some breathing room, but concerns over debt sustainability and future funding remain.
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