The Ministry of Railways has paid around ₹1.93 trillion towards principal and interest on its outstanding debt over the past five financial years, Railway Minister Ashwini Vaishnaw informed the Rajya Sabha on Friday.
The payments were made towards loans owed to Indian Railway Finance Corporation (IRFC), the railways’ dedicated financing arm, as well as the Ministry of Finance.
Railways Stays Away From Fresh Borrowings
Indian Railways has largely stayed out of the borrowing market in recent years as it works to manage its debt levels. The move also aligns with the government’s focus on capital expenditure-led economic growth following the Covid-19 pandemic.
The national transporter has increasingly relied on government budgetary support to fund major infrastructure projects and procure rolling stock instead of depending heavily on extra-budgetary resources.
Interest Payments Cross ₹93,000 Crore
Of the total ₹1.93 trillion repaid over the past five financial years, around ₹93,000 crore went towards interest payments. Principal repayments accounted for approximately ₹1 trillion.
During the Covid-19 period, the Ministry of Railways also received a special loan of ₹79,000 crore from the Ministry of Finance.
Government Support Boosts Railway Investments
Ashwini Vaishnaw said the government has provided adequate Gross Budgetary Support to Indian Railways in recent years. This funding has been used for infrastructure development and the purchase of rolling stock that was previously financed through Extra Budgetary Resources.
The increased budgetary support has helped the railways reduce its dependence on market borrowings while continuing to invest in long-term infrastructure.
IRFC Expands Beyond Railway Financing
Meanwhile, Indian Railway Finance Corporation has been expanding its lending portfolio beyond traditional railway financing to support allied sectors.
The government has also indicated that railway debt servicing has stabilized in recent years despite the financial impact of the Covid-19 pandemic.
Debt Servicing Remains Stable
The Railway Minister told Parliament that debt servicing has remained stable over the past few years despite the disruption caused by Covid-19. The shift towards greater government budgetary support has helped Indian Railways manage its debt obligations while maintaining its focus on infrastructure expansion.
