By Newsgram Staff Writer
In what is described by the railway ministry as “one of the largest funding for the Indian Railways”, Life Insurance Corp (LIC) committed Rs.150,000 crore to Indian Railways for development of various commercially viable projects.
The investment will be done in bonds, over a period of five years. A Memorandum of Understanding (MoU) was signed between the finance and the railway ministry.
On the occasion, railways minister, Suresh Prabhakar Prabhu said that the investment will make Indian Railways prosper in the future, encouraging initiatives and lead to speedier execution of projects.
Speaking on the occasion, the Railway Minister said that this is the first such step in its endeavour to make Indian Railways prosperous in the future. He said that with such encouraging initiatives, the Ministry of Railways will be able to augment its resources for speedier execution of projects. Prabhu said that the resultant enhanced throughput of traffic is likely to further increase the capacity to carry more to meet with a growing transportation demand leading to a robust economy.
Under this MoU, LIC will make available to the Ministry of Railways/its entities a Financial Assistance with a limit of 1,50,000 crore over the next five years for implementing Railway projects. The Financial Assistance will be available from the Financial Year 2015-16. In his Budget Speech, Shri Suresh Prabhu had announced his intention of meeting a part of the total Plan Budget of Rs 1,00,011 crore for the financial year 2015-16, through extra budgetary resources, such as market borrowings by tapping low cost long term funds. The challenge has been successfully met in a substantial measure by the signing of this MoU for mobilising resources.
There would be a five-year moratorium on interest and loan repayment and the rest of the terms would be negotiated while signing the finance assistance agreement.