Railways capex improves after months of slide

17 Dec 2020 CW Staff

During the same period in 2019, the Railways’ capital expenditure stood at Rs 96,000 crore. However, the nationwide lockdown has resulted in the railways losing out pre-monsoon momentum in project execution.

A Railways official said a lot of time had been lost in the March-May phase, which is the most proactive period for various activities. Projects have been disrupted in many parts of the country this year due to heavier rainfall and flood-like situations.

The construction targets for this include 3,750 km of new lines, gauge conversions, doubling or tripling of different railways lines and electrification of 6,000 km of several rail routes.

Although the work on projects has picked up in the last few months, the Railways are witnessing another problem at hand mainly to accelerate its capex. The transporter includes projects worth Rs 1.5 lakh crore that are stuck because of instructions directed by the Railway Board to all Zonal officers. It has directed all officers to rationalise expenditure. Additionally, the Finance Ministry has directed to halt all infrastructure projects that were sanctioned in the current financial year and the ones approved in FY20 whose work has been stagnant.

The projects that have been impacted are cut across states and includes Rs 8,500 crore of new projects’ approved in FY21. Currently, the Railways are undertaking work on projects with an investment of Rs 9.5 lakh crore that includes those carried over from the previous years.

As per sources, the projects on hold would be valid only till the end of FY21. However, there is uncertainty whether the restrictions would be extended. Clarity is expected in the Budget 2021-22.

The Finance Ministry’s rationale was to mobilise the capital for projects by relying on budgetary funds that needed to be controlled due to the tight fiscal constraints.

The Railway Board’s communique has confirmed that new works that are included in the Pink Book 2020-21 would be kept in abeyance. Those works that are likely to impact the running of trains will be considered essential and will be sanctioned. The essentiality of such projects will be examined by the concerned members.

Additionally, the work which has been approved till 2019-20 but has not made significant physical progress will be frozen until further order. It excludes those that are essentially required for the safe running of trains. Moreover, the unutilised provision of different umbrella works of both 2018-19 and 2019-20 may be suspended.

Capital expenditure by the Indian Railways, which deteriorated significantly back in the period from April through July this year has since shown a quick recovery. According to official data, around Rs 94,000 crore—or 58%—of the FY21 target was spent until end November.During the same period in 2019, the Railways’ capital expenditure stood at Rs 96,000 crore. However, the nationwide lockdown has resulted in the railways losing out pre-monsoon momentum in project execution. A Railways official said a lot of time had been lost in the March-May phase, which is the most proactive period for various activities. Projects have been disrupted in many parts of the country this year due to heavier rainfall and flood-like situations. The construction targets for this include 3,750 km of new lines, gauge conversions, doubling or tripling of different railways lines and electrification of 6,000 km of several rail routes. Although the work on projects has picked up in the last few months, the Railways are witnessing another problem at hand mainly to accelerate its capex. The transporter includes projects worth Rs 1.5 lakh crore that are stuck because of instructions directed by the Railway Board to all Zonal officers. It has directed all officers to rationalise expenditure. Additionally, the Finance Ministry has directed to halt all infrastructure projects that were sanctioned in the current financial year and the ones approved in FY20 whose work has been stagnant. The projects that have been impacted are cut across states and includes Rs 8,500 crore of new projects’ approved in FY21. Currently, the Railways are undertaking work on projects with an investment of Rs 9.5 lakh crore that includes those carried over from the previous years. As per sources, the projects on hold would be valid only till the end of FY21. However, there is uncertainty whether the restrictions would be extended. Clarity is expected in the Budget 2021-22. The Finance Ministry’s rationale was to mobilise the capital for projects by relying on budgetary funds that needed to be controlled due to the tight fiscal constraints. The Railway Board’s communique has confirmed that new works that are included in the Pink Book 2020-21 would be kept in abeyance. Those works that are likely to impact the running of trains will be considered essential and will be sanctioned. The essentiality of such projects will be examined by the concerned members. Additionally, the work which has been approved till 2019-20 but has not made significant physical progress will be frozen until further order. It excludes those that are essentially required for the safe running of trains. Moreover, the unutilised provision of different umbrella works of both 2018-19 and 2019-20 may be suspended.

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