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Wednesday, March 11, 2015

Railways signs MoU with LIC for highest ever funding of Rs 1.5 lakh crore over next five years

A Big Step Forward to make Indian Economy more Robust: Suresh Prabhu 

Just within fifteen days of presenting the Railway Budget 2015-16, the Minister of Railways Suresh Prabhu fulfilled yet another commitment of his Budget announcement by achieving the highest ever funding of Rs 1.5 lakh crore for Railways. 

In this historic landmark achievement, a Memorandum of Understanding (MoU) was signed between the Ministry of Railways and Life Insurance Corporation (LIC). Under this MoU, LIC will make available to the Ministry of Railways/its entities a Financial Assistance with a limit of Rs 1,50,000 crore over the next five years for implementing Railway projects. The Financial Assistance will be available from the Financial Year 2015-16. 

In his Budget Speech, Suresh Prabhu had announced his intention of meeting a part of the total Plan Budget of Rs 1,00,011 crore for the financial year 2015-16, through extra budgetary resources, such as market borrowings by tapping low cost long-term funds. The challenge has been successfully met in a substantial measure by the signing of this MoU for mobilizing resources. 

There would be a five-year moratorium on interest and loan repayment and the rest of the terms would be negotiated while signing the finance assistance agreement. 

Speaking on the occasion, the Railway Minister said that this is the first such step in its endeavour to make Indian Railways prosperous in the future. He said that with such encouraging initiatives, the Ministry of Railways will be able to augment its resources for speedier execution of projects. Suresh Prabhu said that the resultant enhanced throughput of traffic is likely to further increase the capacity to carry more to meet with a growing transportation demand leading to a robust economy. He thanked the officials of the Finance Ministry, LIC and the Railway Ministry for working together as a team to make this deal a big success. 
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