Indian Railways will scale down its market borrowings for 2014-15 to Rs 11,790 crore from an earlier specified target of Rs 13,800 crore announced in the interim budget in February.
The decision to reduce market borrowings comes in the wake of a rise in the internal resource component of the Plan, Railway Minister Sadanand Gowda said in his maiden Railway Budget speech in Lok Sabha on Tuesday.
The Plan outlay for Railways in 2014-15 has been pegged at Rs 47,650 crore, which is higher by 9,383 crore over the last fiscal level.
Indian Railways conducts its market borrowings through Indian Railway Finance Corporation (IRFC).
The funds mobilized by IRFC are used to fund the rolling stock of the Railways such as wagons, locomotives and coaches.
In 2013-14, IRFC mobilized Rs 15,200 crore, of which about Rs 5,600 crore ($900 million) was through the external commercial borrowing route.
The weighted average cost of this borrowing was 7.9 percent for a tenor of 10 years.
IRFC has not undertaken any market borrowing in the first quarter of this fiscal as it had sufficient funds to support Railways current procurement plans.