India’s decrepit state-run train services stand to receive at least a 25 percent boost in investment to over $9 billion, funded solely by falling fuel costs, according to officials familiar with a railway budget set to be unveiled on Thursday.
The world’s fourth largest rail network could get even more if Prime Minister Narendra Modi makes it a priority, as China did during its rapid economic growth over the past two decades.
There are high hopes that his nine-month-old government will plough money into investment in infrastructure needed to haul the economy out of a rut when it presents its first annual federal budget on Saturday.
The separate rail budget – a relic of the country’s British colonial past – could show how far Modi’s India is prepared to drive investment in a vital transport sector.
“The fall in diesel prices and a pick-up in freight earnings have given us a golden chance to raise investments,” said one government official.
Falling oil prices have saved billions of dollars in subsidy spending across the economy, but Finance Minister Arun Jaitley is under pressure to prevent the fiscal deficit from busting a target of 3.6 percent of gross domestic product.
Railway Minister Suresh Prabhu, according to the officials, has factored in savings from
via India to embark on rail investment splurge thanks to cheap oil | Reuters.
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