KRCL does not get Union government funds through the railway budget allocation. All its projects are financed from its own receipts or long-term borrowings.

Indian Railway Zones get funds both from Ministry of Railway (More than 90%) as well as in the form of Capital investments from IRFC (Less than 10%) but there's no external debt involved.

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years ago, KRCL did something exceptional by completing this line at break-neck speed while Zonal railways were taking decades to complete mere gauge conversion works. Now IR is doing better than what it was earlier and KRCL has fallen behind.

Right now, the management's focus is on freight revenue and not passenger segment. Nothing has happened in terms of infrastructure development.

KRCL is not a loss-making entity, it actually understates its profit (5000 cr revenue, 127 cr net profit last year) so it doesn't get absorbed by Indian Railway.

Even if the state government shares are bought back/transferred, Indian Railway will still need to pay off or agree in principle to clear the long-term bonds and debt of KRCL which is about 2-3 times the equity prior to acquiring or merging KRCL.