Ministry of Railways intends to sensitize the Banking Community about the Opportunities and Challenges offered by the Railways
The Ministry of Railways and its PSU Indian Railway Finance Corporation (IRFC) hosted a meeting of Banks & Financial Institutions in New Delhi on 31 July 2015. The conclave was organized at the initiative of the Minister of Railways Suresh Prabhakar Prabhu to sensitize the banking community of the opportunities and challenges offered by the Railways' massive investment plans for strengthening and modernizing the key Railway infrastructure in the country.Recognizing the significance of scaling up investment in Railway infrastructure in the country's economic growth, the meeting was addressed by Minister of Railways Suresh Prabhu, the Minister of State for Finance Jayant Sinha and Dr. Raghuram Rajan, Governor, Reserve Bank of India.
In his introductory address, Prabhu drew attention of the Banking and Finance community of the numerous initiatives unfolded in the Railway Budget 2015-16 to modernize the system, to remove bottlenecks and to build capacity. He stated that Railways have drawn up an ambitious investment plan of Rs.8.5 lakh crore in the coming 5 years. He referred to the MOU with LIC which has assured funds of Rs.1,50,000 crore in 5 years for Railway projects. Thereafter, a detailed presentation of Railways' investment plans was made at the meeting.
Jayant Sinha, MOS (Finance) appreciated the Ministry of Railways' plans for massive investments in the sector and emphasized the need to get the projects going without delay as the economy is poised at the profound moment between fiscal consolidation and fiscal expansion. He urged for innovation in financing and structuring.
The Governor, RBI, in his speech pointed out the long term nature of investments in Railways and the need to create appropriate structures which will withstand political and regulatory risks in the long term. Learning from the recent past, financing plans will have to provide for more equity cushion, flexible debt structures and allow for a reasonable coverage of cost overruns. He also stressed the need for developing strong technical and economic skills in Banks and FIs for project evaluation and monitoring.
Representatives from principal Banks and Financial Institutions attended the meeting. Chairman, Railway Board, Financial Commissioner and senior officers of the Railway Board were present. The heads of Railway PSUs also unveiled their investment plans at the meeting.
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