IRFC to refrain from borrowing in the form of debt during FY 2024-25, reveals budget documents | Top Vip News

Indian Railway Finance Corporation (IRFC), which acts as market lending arm for Indian Railways, will refrain from borrowing funds in the form of debt during the financial year 2024-25, according to the budget documents.

The government’s decision to include the Indian Railway Finance Corporation’s (IRFC) internal and extra-budgetary resources (IEBR) as negligible in the 2024-25 budget suggests that it has no intention of borrowing money to fund its capital expenditure. This is the second consecutive year that IRFC’s IEBR has been designated as negligible in the budget.

In 2022-23, IRFC’s IEBR has been fixed at Rs 66.5 billion as part of the budget allocations. As part of the government’s actual estimates, IRFC’s IEBR for 2022-23 was Rs 30,239.43 crore in 2022-23. In 2021-22, IRFC had borrowed Rs 60,683.41 crore from the market.

IEBR comprises funds in the form of profits, loans and equity.

IRFC loans are used to purchase locomotives, wagons and coaches and finance projects.

As on September 30, 2022, IRFC’s cash and cash equivalents stood at Rs 97,020.49 crore. The total assets of the company stood at Rs 4.97 lakh crore.

The decision not to borrow from the market comes in the backdrop of the central government increasing its budget allocation to Indian Railways to Rs 2.52 lakh crore, up 5 per cent compared to 2023-24 and the government’s push for divestment and asset monetization.

The government has set an ambitious disinvestment target of Rs 50,000 crore by 2024-25, about 67 per cent higher than its revised target of raising Rs 30,000 crore through asset sales in the current fiscal year ending March 31st.

The push for disinvestment and asset monetization can also be seen in the government’s decision to set up the National Highways Authority of India as negligible in 2024-25.

This is the third consecutive year when NHAI’s market borrowing has been considered negligible.

In 2022-2023, the government asked the highway developer to limit its loans. In the 2022-23 budget, the government projected that NHAI’s IEBR would fall to around Rs 1 lakh crore, from Rs 65,000 crore in 2021-22.

As per the government’s revised estimates, the NHAI did not spend any money as IEBR in 2022-23.