Pumped up by Modi’s promise of budgetary support, Indian Railways sets a high capex target for FY 2016-17

Indian Railways, which was under extreme pressure to step up its capital expenditure (capex) for the required boost to the economy, finished the last financial year with a record high capex of Rs 94,000 crore. Reports suggest that the capex has increased by Rs 37,000 crore when compared with last fiscal.

Boosted by this improvement, Indian Railways have set a target of Rs 1.5 lakh crore for this financial year. Not only this, PM Modi assured the railways ministry of an enhanced Gross Budgetary Support (GBS) of up to Rs 60,000 crore if it continues the growth.

Earlier, GBS for 2016-17 was announced to be Rs 40,000 crore, but it was cut short by the finance ministry that cited low spending by the railways in the first six months of the financial year.

"This came as a wake-up call for the ministry. The minister (Suresh Prabhu) had been prodding the system but it proved more slothful than he had imagined. It was then that he decided to crack the whip," a senior official at Rail Bhavan told ET on the condition of anonymity.

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