In order to reduce the dependence of gross budgetary support (GBS) from the central government, the parliamentary standing committee on railways has asked the ministry of railways to increase its focus on public private partnership (PPP) projects. “The committee feels that Railways need to be more ambitious with regard to private sector participation in railway infrastructure and set higher PPP targets to reduce their dependence on government for budgetary support,” it said in a report.
Over the past few years, the railways has been receiving record GBS to support the expansion and modernisation of rail network. For instance, in FY26, the annual plan has been kept at Rs 2.65 lakh crore, which is the similar to the previous financial year. At the same time, other erstwhile prominent sources of funding – PPP, financing through state-run IRFC – has gone down to almost nil. For instance, in FY26, the railways is funding over 95% of its capex through GBS in comparison to less than 5% through “other sources” (extra budgetary resources – partnerships).
Even though the standing committee has noted that market borrowing (from IRFC) for capex increases financial liabilities as it entails debt servicing from its revenues, it has asked railways ministry to find ways to increase private sector participation in the creation of railway infrastructure.
Further, the committee has said to fast-track the work on the proposed dedicated freight corridors. For instance, the DFCCIL (Dedicated Freight Corridor Corporation of India) has submitted detailed project reports (DPRs) for three new corridors, including east-coast corridor, east-west corridor and north-south sub-corridor. But the railways ministry has said that the sanctioning of these corridors depends on factors like traffic volume, techno-economic feasibility and financial viability.
The standing committee said that the ministry should fast track its studies on these aspects so that the work can be initiated on new DFCs without further delay. “The committee also urge that the work on the remaining portion of the WDFC (western dedicated freight corridor) be completed within the time frame decided without further extension of date,” the report said.
