"The government wants that the railways to use private funds for completion of their various projects. In addition, project implementation through formation of special purpose vehicles should be encouraged," said an official.
The government had increased its budgetary support marginally during the current year by Rs 443 crore (Rs 4.43 billion) or 6.73 per cent compared to Rs 6,577 crore (Rs 65.77 billion) the previous year.
Officials have indicated that the government wanted the Railways to prioritise its projects so that preference was given for modernisation, safety and capacity enhancement works.
Sources said the railway ministry was asked to come up with a systematic plan, keeping these considerations in mind.
The ministry officials admitted that a major portion of its expenditure was directed towards projects of social importance instead of financially viable projects. "Despite having a huge project over-run, the railways is unable to give them up due to social and political considerations," an official added.
Taking such projects and other important works relating to safety and modernisation into account, the Railways had asked for about Rs 4,500 crore (Rs 45 billion) more support for 2005-06.
The greater part of the support demanded was to be directed towards the Rs 24,000 crore (Rs 240 billion) modernisation plan of the Railways.
The Integrated Railway Modernisation Programme spanning over five years till 2010 was announced this year by the Railway Minister Lalu Prasad.
The IRMP, however, mainly comprised the on-going programmes that lay incomplete due to lack of resources. The major new proposal relates to introduction of high-speed trains.
The GBS includes contribution towards Special Railway Safety Fund and the Railways' share out of the central road fund .
For 2004-05, the GBS of Rs 7,020 crore included Rs 2,075 crore for SRSF and Rs 401crore (Rs 4.01 billion) from the CRF. About Rs 300 crore (Rs 3 billion) were also allocated for the Udhampur-Srinagar-Baramulla project.
GBS station
With a GBS of Rs 7,020 crore for 2005-06, the Railways may rely more on private investment.
The GBS had been scaled by Rs 443 cr or 6.73% in 2004-05, over the previous year's Rs 6,577 cr.
The Railways had sought an additional GBS of Rs 4,500 crore for 2005-06.
A chunk of railway expenditure on social projects rather than financially viable ones.
More from rediff