Railways is scouting for new ways to generate funding including through offshore rupee bonds as part of its ambitious Rs 1.21 lakh crore capital expenditure plan for 2016-17.

Besides, the public sector behemoth is also looking at forming joint ventures with states, signing new PPP agreements and engaging multilateral and bilateral agencies to mop up investments, Union Minister Suresh Prabhu said while presenting the Railway Budget for 2016-17.

Prabhu further said that this magnitude of investment calls for abandoning business-as-usual approach and continually innovating to find new ways of sourcing funds and executing projects.

"This year our investment would be close to double of the average of previous years -- a feat never achieved earlier.

For the year 2016-17, the capital expenditure plan has been pegged at Rs 1.21 lakh crore," Prabhu said.

"Be it by forming joint ventures with states, developing new frameworks for PPP, scouting international markets for rupee bonds or engaging with multi-lateral and bilateral agencies, Indian Railways will be at the forefront of infrastructure growth in the country," he said.

This would be the first time, that the Indian Railways will go to the international markets to fund its investment plans.

On the multiplier effect of the investment, he said every rupee of investment in Railways has the capacity to increase economy-wide output by Rs 5.

"The impact that this increased investment in Railways will have on the economic growth of the country is unprecedented. It would also lead to realising the vision of a modern and efficient railway system," the Railway Minister said.

Prabhu said the huge expenditure on Railways is a breaking away tradition from earlier practice when the average capital expenditure for 2009-14 was of Rs 48,100 crore.

He said the government has ramped up capital expenditure to remove the huge backlog of the past as well as to provide for the current and future needs of the Railways.

"We have overhauled age-old process, bottlenecks and delegated powers effectively to the functional levels. As a result, the rate of capital expenditure has increased substantially in the later quarters of the year and should now grow exponentially. We will continue to employ this new approach to our capital expenditure," he added.

PTI