More private trains, higher spending, green energy focus — what Rail Budget could look like

Ministry of Railways has sought a rise in its capital expenditure from the existing Rs 1.6 lakh crore to 1.8 lakh crore. But the actual increase could only be up to Rs 8,000 crore.

Indian Railways (representational image) | Commons

New Delhi: More private trains, new train sets for faster routes, expansion of Kisan Rail, better connectivity with the Northeast, and a focus on green energy — these are some of the areas on which the upcoming budget for the Railways could be focused.

According to sources in the Ministry of Railways, it has suggested that its capital expenditure be enhanced from the existing Rs 1.6 lakh crore to 1.8 lakh crore in the budget to be presented on 1 February.

However, a senior railway official said the actual increase in the Railway Budget may not be more than 3-5 per cent (Rs 5,000-8,000 crore) given the fiscal situation after the Covid-19 lockdown.

While the Railways suffered losses in revenue from passenger trains to the tune of 87 per cent — down from Rs 53,000 crore in 2019 to just Rs 4,600 crore in 2020 — the operating ratio improved significantly given the fall in expenditure.

The operating ratio measures the expenses of the Railways as a proportion of revenue, and is said to be a more accurate indicator for assessing the performance of the Railways.

With passenger revenue expected to get a boost in 2021, and the Railways building on its successes in freight movement during the lockdown, the Indian Railways will seek to turn its focus to the National Rail Plan 2024 in the upcoming year, sources said.

What the plan aims for

As part of the plan, the Railways will seek to focus on business and infrastructure development to meet its objective of 2,024-million-tonne freight loading capacity by 2024.

The plan also seeks to rationalise freight tariff in order to compete more effectively with the roadways, to reduce transit time and cost, and also achieve net-zero greenhouse gas emissions by 2030.

The Railways has also planned multi-tracking of 16,373 km under its Vision 2024. This would entail 32 essential projects, 68 critical projects, 58 super critical projects, 146 electrification projects, 20 additional coal connectivity projects, 120 traffic facility works, 686 signalling and telecommunication works and Northeast connectivity projects, among others.

The vision for 2024 can be achieved with a capital expenditure of Rs 2.9 lakh crore, sources said.

There will also be a focus in the upcoming year on completing the three dedicated freight corridors spread across 3,958 km, in addition to starting work on the several new high-speed rail corridors which have been identified.

In addition to the budget, officials said, the Railways is constantly exploring new models for financing, including public-private partnership. While the Railways has already invited bids to operate 150 private trains on 100 identified routes, it seeks to expand on public-private partnerships in the upcoming year. It would also focus on starting more bullet trains.

What other stakeholders want from budget

Commenting on the expectations from the upcoming budget, Alain Spohr, Managing Director of Alstom, a French multinational rolling stock manufacturer, said the firm expects further support to growth in the railway sector in the Budget.

The Railways should be added as a sector to the government’s newly launched Production Linked Incentive (PLI) Scheme, as doing so could turn India into a “manufacturing powerhouse”, he said. In addition, the government should “devise targeted recovery plans which can further incentivise foreign investments and provide a fillip to the Make in India initiative” in this sector, he added.

While Spohr welcomed the Atmanirbhar Bharat Abhiyan, he said the government must also undertake measures to “ensure a level-playing field between original domestic companies and foreign companies who have demonstrated genuine and sincere efforts to develop domestic capacities and capabilities, through significant industrial investments and robust transfer of technologies”.

All India Railwaymen’s Federation (AIRF) general secretary Shiv Gopal said the government must focus on developing infrastructure and augmenting capacity.

“While new schemes are launched, the focus should also be on enhancing existing capacities… For example, the government should be focused on laying new rail lines, doubling the lines where there is one line, tripling where there are two,” he said.

“In addition, it must be ensured that the Dearness Allowance and Dearness Relief, which has been frozen for all government employees is given to them… Due to Covid, several employees have even lost their lives, they should not feel cheated,” Gopal added.