By Dr. Gyan Pathak
Interim Union Budget 2024-25 for railways neither generated much hope for betterment of railways operations nor services to its commuters, though Union Finance Minister Nirmala Sitharaman has announced three major economic railway corridor programmes to be implemented, and 40,000 normal bogies to be converted to the Vande Bharat standard.
The budget has earmarked a capex of only Rs 2.55 lakh crore for the Indian railways, which is just marginally higher than the Rs 2.4 lakh crore announced in the last year’s budget. It has dashed the hopes of many who were expecting big push to the railway’s infrastructure.
The dashed hope was reflected in the stock market just after the budget presentation, when several stocks of companies related to railways started trading lower. Investors had expected concrete big push and had big expectations as it was evident from the morning stock market ahead of budget presentation, when in rail stocks trade associated with railways showed positive momentum. Capex in Railways was expected to be increased substantially, given the number of infrastructure projects under implementation for modernization of the sector.
However, announcements made are much less than the expectations which were very high due to the forthcoming Lok Sabha general election to be held in April-May 2024. The common people expected more trains, bogies, and public amenities but they are disheartened. Railways, in fact, is financially in very bad shape perhaps not in a position to do much more.
Net Revenue for the railways has been estimated at Rs 2800 crore for the financial year 2024-25, which has been unrealistically calculated at a time when it has been declining. Actual revenue in 2022-23 was Rs 2517.38 crore, which declined to Rs 2210 crore in the 2023-24 (Budget Estimate), which further declined to Rs 2000 crore in 2023-24 (Revised Estimate). Its operating ratio was 98.65 per cent in 2023-24 (RE).
Actual total receipt of India Railways, was Rs 240,176.96 crore in 2022-23 (actual), which was estimated to rise to Rs 265,000 crore in 2023-24 (BE), but was found to be Rs 258,600 crore in 2023-24 (RE). As against this total expenditure of the Indian Railways has been on the rise which were Rs 237,659.58 crore in 2022-23 (actual), Rs 262,790 crores in 2023-24 (BE), and Rs 256,600 crore in 2023-24 (RE). Now the interim budget 2024-25 has estimate it to rise to Rs 275,700 crore.
Under this dismal performance of Indian Railways, Sitharaman has however made vague announcements that three major economic railway corridor programmes will be implemented, namely – energy, mineral and cement corridors; port connectivity corridors, and high traffic density corridors. These projects have been identified under the PM Gati Shakti for enabling multi-modal connectivity. They will improve logistics and reduce cost, she emphasized. Given the bad revenue position and minor increase in capex, implementation would not be smooth, perhaps will be impossible.
Nevertheless, she asserted that the resultant decongestion of the high-traffic corridors will also help in improving operations of passenger trains, resulting in safety and higher travel speed for passengers. Together with dedicated freight corridors, these three economic corridor programmes will accelerate our GDP growth and reduce logistic costs.
In the nature of the three economic corridors to be implemented, it will further push unequal and lopsided development of the country, since all the three corridors are for the specific areas where there is already certain level of development has been taking place. It will therefore remain a matter of great concern for the people of the less developed states or regions of the country, which may not fit into these schemes. These economic corridors are thus not inclusive programmes which the less developed or backward regions badly need.
As for the passenger traffic, there is nothing much. Ms Sitharaman has announced that 40,000 normal rail bogies will be converted to the Vande Bharat standards to enhance safety, convenience and comfort of the passengers. It is again an eye wash for the people who have suffered several rail disasters in the last few years, and they were not due to unsafe bogies, but for other security lapses including bad signalling and rail tracks systems. The interim budget has nothing much in this regard.
It means that common people have met a raw deal in railway travel, since the way the railways have been implementing its programme has been making the rail travel out of reach of the common people, on several account including making the travel costlier and non-availability of enough trains and coaches for the lower classes.
The government has been focusing on costlier form of rail travel in the last few years, and the number of such trains and bogies are being made available for those who can afford. Vande Bharat is one of the examples which has become the priority area of the government. The interim budget for railways reveals that Vande Bharat is now among government’s key priorities. The other priorities, as announced would be expansion of key rail infrastructure projects such as Metro Rail and Namo Bharat to additional cities.
It may be recalled that Vande Bharat trains, the new version of the railway was unveiled by the Minister of Railways during post-budget 2023-24 media briefings. These trains are designed for longer journeys, spanning over 800 km. Production of these trains is underway at ICF Chennai. It was expected that government would introduce the sleeper version of Vande Bharat and level of new production would be greatly enhanced. However, the government chose to convert the 40,000 bogies into Vande Bharat, which may impact low-cost journeys by poor and disadvantaged people who cannot afford the costly travel. (IPA Service)
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