Former finance secretary Subhash Chandra Garg has said that increase in the capital expenditure (capex) provisions for 2020-21 in the Budget is an ‘optical illusion’ and that for the next fiscal is ‘excessively optimistic and proforma’. He pointed out that Finance Minister Nirmala Sitharaman highlighted in her Budget speech a massive increase of 34.5 percent in the capital expenditure budget estimates of year 2021-22 (BE 21-22) to Rs 5.54 lakh crore from Rs 4.12 lakh crore in BE 20-21. The revised estimates (RE) of capital expenditure for FY 2020-21 have also gone up to Rs 4.39 lakh crore, recording an increase of 6.55 per cent.
According to Garg, a closer scrutiny of capital expenditure of Railways for 2020-21 reveals large revenue expenditure disguised as capital expenditure, which creates the optical illusion of higher capex in the fiscal. Elaborating on the point, he said capital expenditure under all the regular heads of Railways for 2020-21 has heavily under-performed during the year.
He also stated that capex for the new lines' construction has reduced from Rs 12,000 crore to only Rs 929 crore, for gauge conversion from Rs 2,250 crore to Rs 26 crore, for rolling stock from Rs 5,787 crore to Rs 2,004 crore, for track renewals from Rs 10,599 crore to nil and so on. However, he said the government from General Budget gave a 'Special Loan for Covid Related Resource Gap' of Rs 79,398 crore to Railways to provide liquidity support to railways to meet its losses in the current year and also for 'liquidating adverse balance in the public account' of Railways for the year 2019-20.