Indian Railways Budget

The Indian Railways (IR) has undergone changes since the merger of its budget with the general budget in 2017. This shift has diminished the prominence of the IR in financial discussions. Recent Budgets have not adequately addressed the financial challenges facing the IR. Despite substantial investments in infrastructure, the returns on these investments have been disappointing.

Historical Context

Before 2017, the Railway Budget was a standalone event, showcasing plans and achievements of the IR. The merger with the general budget has led to a lack of focus on railways. Consequently, the IR has become a minor mention in broader fiscal discussions. This has raised concerns about its financial health and operational efficiency.

Financial Overview

The IR has received ₹13 lakh crore in funding over the past decade for modernisation. Despite this, its operational earnings barely cover costs. Current freight traffic growth is stagnant at just over 2%. Passenger revenue is increasing, but overall patronage remains below pre-COVID levels. The latest budgetary allocations indicate a downward adjustment in capital expenditure, signalling a need for reassessment.

Infrastructure Developments

The Railways Minister has brought into light efforts in infrastructure development. Key initiatives include modernising stations, enhancing connectivity, and improving safety. An average of 150 km of new tracks has been laid annually since 2014, a notable increase from previous years. However, safety measures, particularly the rollout of the Kavach system, have not kept pace with expectations.

Electrification Efforts

India’s electrification rate has improved, with an average of 294 Rkms per year since 2014. This positions India to achieve a fully electrified railway network. However, questions arise about the necessity of such rapid electrification. The IR still relies heavily on fossil fuels for electricity generation, raising concerns about sustainability.

Future Projects and Challenges

The announcement of 200 additional Vande Bharat trains lacks a clear timeline. Major projects like the Western Dedicated Freight Corridor and the Mumbai-Ahmedabad High-Speed Rail remain pending. The ambitious plan to establish a 7,000-km high-speed rail network by 2047 appears more aspirational than practical, lacking a comprehensive strategy.

Operational Efficiency and Market Share

The IR aims to become the world’s second-largest freight carrier, targeting 1.6 billion tonnes of cargo. However, achieving this goal requires reclaiming freight market share. The IR must enhance train speeds and passenger comfort to remain competitive.

Questions for UPSC:

1. Critically examine the impact of the merger of the Railway Budget with the General Budget on the financial health of Indian Railways.
2. Discuss the significance of electrification in Indian Railways and its implications for sustainability.
3. What are the challenges faced by Indian Railways in enhancing freight traffic? Discuss with suitable examples.
4. Explain the role of infrastructure development in improving the operational efficiency of Indian Railways. How can it affect passenger experience?

Answer Hints:

1. Critically examine the impact of the merger of the Railway Budget with the General Budget on the financial health of Indian Railways.

1. The merger diminished the visibility of Indian Railways (IR) in fiscal discussions, reducing focused financial scrutiny.
2. IR’s financial challenges have been less addressed in recent budgets, leading to concerns about operational efficiency.
3. Despite ₹13 lakh crore investment over a decade, operational earnings barely cover costs, indicating poor financial health.
4. The lack of specific budget allocations for IR’s needs has resulted in stagnant growth in freight traffic and reduced patronage.
5. Overall, the merger has led to a lack of accountability and proactive measures to address IR’s financial issues.

2. Discuss the significance of electrification in Indian Railways and its implications for sustainability.

1. Electrification has improved operational efficiency, with India achieving a rate of 294 Rkms per year since 2014.
2. A fully electrified network positions India as the world’s “greenest” railway, reducing reliance on diesel fuels.
3. However, rapid electrification raises questions about the necessity, as many diesel locomotives remain underutilized.
4. The current electricity generation still heavily relies on fossil fuels, undermining sustainability claims.
5. Future sustainability will depend on integrating renewable energy sources into IR’s electrification strategy.

3. What are the challenges faced by Indian Railways in enhancing freight traffic? Discuss with suitable examples.

1. Freight traffic growth is stagnant at just over 2%, indicating challenges in market competition and efficiency.
2. Infrastructure bottlenecks, such as the pending Western Dedicated Freight Corridor, hinder capacity expansion.
3. IR struggles with outdated rolling stock and track systems, impacting speed and reliability of freight services.
4. Competition from road transport, which offers flexibility and speed, further complicates freight growth efforts.
5. Without improvements in service quality, IR risks losing market share to alternative logistics providers.

4. Explain the role of infrastructure development in improving the operational efficiency of Indian Railways. How can it affect passenger experience?

1. Infrastructure development is critical for enhancing connectivity and reducing travel times, directly impacting operational efficiency.
2. Modernized stations and improved rolling stock can elevate passenger comfort and satisfaction.
3. The average addition of 150 km of new tracks annually since 2014 has helped alleviate saturation issues in some areas.
4. However, delays in major projects, like the New Delhi station redevelopment, hinder overall progress.
5. Effective infrastructure improvements can lead to increased ridership, better service frequency, and ultimately, higher revenue.