Context: The Union Budget allocated Rs 2.55 lakh crore for Indian Railways in the latest budget. Despite significant investments and announcements, execution challenges remain in the Railways sector.
Relevance of the Topic: Prelims: Railway Sector in India- Key Trends
Railways Budget
- Till 2017, the Railway Budget was presented separately before the Union Budget. In 2017, it was merged with the general Budget.
- The Union Budget 2025 allocated Rs 2.55 lakh crore for Indian Railways in the latest budget, making a reduction from Rs 2.62 lakh crore allotment last year.
Positives in Railway Development
- Infrastructure Development:
- New railway lines, doubling, and gauge conversion to proceed at an accelerated pace.
- Commissioning of 31,180 km tracks since 2014. The pace has increased from 4 kilometers per day in 2014-15 to 14.54 kilometers per day in 2023-24.
- Electrification:
- Electrification of 41,655 Route Kilometers since 2014. Indian Railways has electrified 294 Rkms/year (2014-25), a 16-fold increase from 18 Rkms/year (2009-14).
- India is projected to have 100% electrified railways, making it the “greenest” in the world.
- All-time high freight loading:
- Railways recorded an all-time high freight loading of 1,588 million tonnes (MT) in FY 2023-24, a substantial increase from 1,095 MT in 2014-15.
- Target: 3,000 MT by 2030.
- Revenue:
- Railways reported record total receipts of ₹2,56,093 crores in FY 2023-24, generating a net revenue of Rs 3,260 crore.
- Safety-related initiatives:
- Kavach, an Automatic Train Protection system to prevent collisions, has been deployed over 1,465 kms and integrated into 144 locomotives.
- Kavach automatically applies brakes when a loco pilot fails to act.
- Kavach 4.0 has been approved by the Research Designs and Standards Organisation (RDSO) in 2024.
- Kavach, an Automatic Train Protection system to prevent collisions, has been deployed over 1,465 kms and integrated into 144 locomotives.
Capital Expenditure and Financial Concerns:
- Railway surpluses are insufficient to pay for their planned capital expenditures (which include building lines and buying wagons).
- Capital expenditure is supported by the grant from the Central government and extra-budgetary resources, given that Railways earnings barely cover its operational costs.
- Over the last decade, ₹13 lakh crore has been invested in modernising infrastructure, including:
- 95% electrification of tracks
- Expanding track length
- Record additions to rolling stock.
- Despite this, financial performance remains weak:
- Stagnant growth of freight traffic- at just over 2% growth.
- Passenger revenue is rising, but patronage (passenger numbers) remain below pre-COVID levels.
- Operating Ratio (OR) remains below 100.
Other Challenges in Railways:
- Safety: Kavach safety system has not seen any expansion beyond 1,465 km.
- Station Redevelopment Concerns:
- Amrit Bharat station redevelopment projects show limited progress.
- Major projects like New Delhi station face delays due to repeated re-tendering.
- Shift from Public-Private Partnership (PPP) to Engineering, Procurement, and Construction (EPC) mode raises concerns about maintenance funding.
- Concerns in Electrification:
- Approx 5,000 diesel locomotives, worth ₹30,000 crore remain idle or underutilised.
- Environmental challenge: A significant portion of electricity still comes from fossil-fuel-based plants.
- Concerns in Freights:
- Declining freight share compared to other modes of transport. Freight expansion requires structural and policy interventions beyond budgetary allocations.
- Lack of clear strategy:
- Announcement of 200 new Vande Bharat trains without a specified timeline.
- Vision of a 7,000-km high-speed rail network by 2047 lacks a concrete strategy.
- Pending Projects: No update on pending projects like:
- Western Dedicated Freight Corridor
- Mumbai-Ahmedabad High-Speed Rail
- Conversion of Integral Coach Factory (ICF) coaches to Vande Bharat standards.