Railways to seek Rs 2000 crore loan from FinMin

Reflecting its financial trouble, Railways is seeking a Rs 2000-crore (Rs 20-billion) loan from the Finance Ministry to meet the expenditure of ongoing development projects.

"Our Minister (Dinesh Trivedi) has already spoken to the Finance Minister about the loan and I am meeting the Finance Secretary on October 10 for it," Railway Finance Commissioner Pompa Babbar told PTI.

On the nature of the loan, she said it would be a 'bridge' loan.

"The modalities of the bridge loan is being worked out."

Asked whether the loan is being sought to meet the requirement of bonus payment to about 13 lakh (1.3 million) railway employees, Babbar said, "No, we have budgetary provision for paying salary and bonus."

The Union Cabinet on Friday approved railways' proposal to give 78-day productivity-linked bonus to its 12.61 lakh (1.26 million)

employees during the festival season.

The bonus expenditure is estimated at Rs 1098.5 crore (Rs 10.98 billion) to railways.

Despite facing the financial crunch, railways decided to give more bonus than last year. The national transporter had given 77 days productivity linked bonus to its employees last year.

Railways' cash surplus has been reduced to Rs 75 lakh (Rs 7.5 million) while the working expenses of Railways have increased from Rs 41,033 crore (Rs 410.33 billion) in 2007-08 to Rs 73,650 crore (Rs 736.5 billion) in 2011-12.

The pension outgo during the same period has also increased from Rs 7,953 crore (Rs 79.53 billion) to Rs 16,000 crore (Rs 160 billion).