Debt Service Fund

Debt Service Fund

v  Created a new fund in the year 2013-14 year.

v  Object: To meet the liabilities for debt servicing of Japan International Cooperation Agency and the World Bank loans taken for the Dedicated Freight Corridor project and obligations of future Pay Commissions/Awards.

v  Allocation for the current year 2013-14 is Rs.4,163 Crores and Interest accrued on balance of the Fund is Rs.83.26 Crores (Total 4246.23 Crores)

v   Credits to the Fund:  A) From the net surplus (Railways' excess of receipts over expenditure) of the Indian Railways after appropriating the amounts to Development Fund and Capital Fund. B) Interest on closing balance of the Fund.

v   Debits to the Fund:  A) to meet committed liabilities of debt servicing for World Bank and JICA- Japan International Cooperation Agency loans for DFC B) Other future liabilities arise due to implementation of future Pay Commissions/Awards etc.

v

v  Importance:

A) Railways finances were burdened so much in the years 2008-09 and 2009-10 years due to implementation of 6th Pay Commission recommendations retrospectively from the year 01.01.2006 onwards. Also JICA and World Bank financing on very big scale the ambitious project of DFC - Dedicated Freight Corridor which is expecting the cost of Rs. 95,836 Crores. 

B) Western DFC (1,499 km) is being funded by loan from Japan International Cooperation Agency (JICA) to the extent of 77% of the project cost. Out of 1,839 km of Eastern DFC, 1,183 km of Ludhiana-Khurja-Dadri-Kanpur-Mughalsarai section is being funded through loan from World Bank to the extent of 66% of the project cost.

C) Unless contributing annually from the surpluses, the repayment of loans to the JICA and World Bank and meeting the 7th Pay commission obligations will be a major burden on the Railway Finances.  In order to prevent the huge burden on Railway finances, this Fund is created and planned to allocate the contributions from the excess of Receipts over Expenditure from 2013-14 year onwards.

v  During the year 2016-17 , Rs.3000 Crores from the Fund balances were utilised to meet 7th Pay commission arrears.  To accountal this, separate Classification/Allocation was enabled under all Demands (i.e., Demand No.4 to 13) - Sub Head 990 under Credits & Recoveries- Amount met from Railway Debt Service Fund Link is ACS128 to Finance Code II

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