Interim Budget for Railways: India’s Budget for this fiscal year had allocated Rs 2.4 lakh crore to the Indian Railways. This was the highest ever allocation to the national transporter and continued on the trend followed last year with a gross budgetary support of Rs 1.37 lakh crore in fiscal 2022-23.
“This allocation is over nine times the amount earmarked in financial year 2013-14,” Finance Minister Nirmala Sitharaman had said in her Budget speech.
This allocation was learnt to be spent in laying new lines with an aim to decongest the Indian Railways and make it future ready. It is estimated that there is a need to lay 1 lakh kilometres of tracks (including doubling of existing ones) over the coming 25 years as more goods movement shifts away from roads to railways.
With less than a month to go for the Interim Budget announcements on February 1 by Sitharaman, most of the 1.4 billion Indian citizens will watch for what the government has to allocate for the railway network that had a topsy turvy year in 2023.
India launched more Vande Bharat trains and deployed faster non-airconditioned services called Amrit Bharat trains. However, key modernatisation drive of the government was also marred with scars of news of several derailments of rail carriages and definitely the shocking balasore train accident.
As India accelerates the modernisation drive while unclogging the rail network with dedicated freight corridors, it now also harbours dreams to eliminate waiting lists for trains.
With such plans, the interim budget’s stance on railways, particularly ahead of the Lok Sabha elections where Prime Minister Narendra Modi is seeking to return to power for a third term, will be one the most exiciting things to watch out for.
The budget will have the task to ensure happy rail rides for Indians who travel on the world’s fourth largest railway network for purposes ranging from finding or going to jobs, fixing health or even travellling to get married.
Indian Budget’s Rail allocations & safety spends
The Supreme Court, inquiring about safety measures following the tragic three-train collision claiming nearly 300 lives in Odisha’s Balasore district, recently pressed the Indian government for updates. Specifically, the court sought information on protective measures already implemented or planned, such as the ‘Kavach’ automatic train protection system, aiming to avert future rail accidents across the nation.
According to railway ministry data, the count of significant train mishaps decreased from 473 in 2000-01 to 135 in 2014-15 and further to 48 in 2022-23. The statistics revealed an annual average of 171 consequential train accidents between 2004 and 2014, followed by a reduced average of 71 per year from 2014 to 2023.
However, in June, India was shaken by a three-way train collision that killed hundreds in what was seen as the worst train disaster in two decades in a country that is busy boasting introduction of modern locomotives, nurtures dreams of bullet trains and allocates record money to its railway network.
The horrifying accident involved the Bengaluru-Howrah Superfast Express, the Shalimar-Chennai Central Coromandel Express, and a goods train. Sources had suggested a potential signaling failure for the deadly crash.
The railways said the anti-train collision system, or Kavach, as the Modi government named it, was not installed on the route where the tragic collision occurred, triggering questions as to why the Kavach is a minion compared to the gigantic Indian rail network, as it has the potential to avoid catastrophic accidents.
Indian Railways manages the fourth largest railway system and the length of railway routes across India is reportedly over 68 thousand kilometers. The government till Jan 31 has commissioned a total route length of 1,724 km of dedicated freight corridors out of the total 2,843 km it plans to build.
Indian Railways has installed the so-called Kavach, or the anti-collision system, on only 1,445 km of route so far, according to media reports.
Over the nine-year tenure of the current government, Indian Railways allocated ₹1,78,012 crore towards rail safety, covering the budget estimate for FY24. The average annual expenditure stood at ₹17,801 crore, marking an increase of 2.5 times compared to the safety expenditure before 2014.
As inadequate track quality remains a prime factor behind train accidents, the railway sector has prioritised this aspect significantly. Between FY15 and FY23, an annual expenditure of ₹10,201 crore was directed towards track renewals, in contrast to ₹4,702 crore spent during FY05 to FY14.
Moreover, expenditure on high-grade rails surged during this period, surpassing double the previous amount to reach ₹13,746 crore per year.
Indian Railways is set to enhance the speed of Vande Bharat trains, according to Railway Minister Ashwini Vaishnaw. Speaking in the Lok Sabha, the minister stated that safety fencing will be installed at vulnerable locations to enable the trains to operate at speeds ranging from 110 kmph to 130 kmph.
What is elemental is safety of passengers and interim budget will thus have to look for allocating funds to fix or upgrade creaky rail infrastructure to ensure safety.
Will Interim Budget divulge plans of no-waiting list?
Ashwini Vaishnaw has disclosed a strategic initiative by the Indian Railways to procure new trains, estimated at ₹1 lakh crore, to address the escalating demand in passenger travel across the national rail network. Vaishnaw revealed to ET that approximately 7,000-8,000 new train sets are needed to replace aging rolling stock, with tenders expected to be issued over the next 4-5 years. The procurement process, spread across 15 years, aims to upgrade the existing fleet.
This ambitious endeavor is part of a broader effort to enhance the country’s rail infrastructure, aiming to augment the availability of trains for passengers and freight by streamlining tracks and increasing travel frequency. Presently, Indian Railways operates 10,754 daily train trips, and the agenda is to augment this with an additional 3,000 trips to eliminate waiting lists entirely.
The procurement of these trains will not only include the purchase but also involve maintenance contracts, stipulating that they are manufactured in India, leveraging existing railway infrastructure. The intent is to fulfill the long-term vision of an uninterrupted rail network that serves over 700 crore passengers annually, expected to soar to 1000 crore by 2030.
However, the imminent challenge remains the allocation of necessary funds in the upcoming Budget to realise this ambitious plan.
Moreover, India is actively striving to unclog tracks to ensure seamless travel for both cargo and passenger services, notably by constructing dedicated freight corridors across the country. Vaishnaw highlighted the substantial progress in the Eastern Dedicated Freight Corridor, covering 1337 kilometers, which is poised to facilitate the emergence of new industrial hubs and Gati Shakti Cargo Terminals. Additionally, almost 80% of the Western Dedicated Freight Corridor has been completed, laying the groundwork for expeditious movement of both passengers and goods.
A quick guide on how to read the budget
To help people understand better, an easy-to-read guide explaining the Budget document is available. After the finance minister presents the budget in Lok Sabha, these important papers quickly appear on the official website. This helps spread important financial details to many people fast.
What is growth recession & why should the government worry about it?
“Growth recession,” as described by Fabricant, resembles an economic slowdown that’s less severe than a full-scale contraction. It involves declining growth rates accompanied by job reductions, sharing similarities with both a slowdown and a recession.
What are expenditure & revenue budgets?
The Expenditure Budget assigns funds for distribution to different ministries, departments, and sectors. Within this, Revenue Expenditure doesn’t generate assets or decrease liabilities. It covers expenses like salaries, pensions, interests, administrative costs, defense, healthcare, and other services, being recurrent in nature.