Finance Minister's Rail Budget Boosts Industry: Major Lines, Vande Bharat Expansion Announced

1 Feb 2024 , 12:52 PM

On Thursday, Nirmala Sitharaman, the Finance Minister, announced that almost 40,000 regular bogies will be changed to standard Vande Bharat bogies.

She unveiled the interim budget together with the announcement of three significant railway corridors: the high traffic density corridor, the port connectivity corridor, and the energy, mineral, and cement corridor.

The railway ministry has asked for an increase in budgeted capital expenditures to finance long-term infrastructure projects such as freight lanes and quicker trains, as well as to modernise the fleet with newer carriages, locos and trains.

The additional capital expenditures would be used to update the signalling systems and introduce 300–400 Vande Bharat trains in different configurations, one of which would contain sleeper cars.

The government allocated the Indian Railways an unprecedented ₹ 2.4 lakh crore in the final full budget of Prime Minister Narendra Modi’s second term, the largest amount ever given to the national transporter. With this allocation, the gross budgetary support for fiscal 2022–2023 remained at ₹ 1.37 lakh crore, following the increasing trajectory started in the previous fiscal year.

One of the main forces behind the National Logistics Policy and the PM GatiShakti programme is the railways. The goal of the ₹ 100 lakh crore PM GatiShakti, the National Master plan for multi-modal connectivity, is to decongest the railway network by 51% by 2024–2025. The ambitious project of constructing new railway lines was the target of the significant funding allocation, which was intended to relieve network congestion and guarantee Indian Railways’ readiness for the future.

The railway industry prioritised track quality in order to address the primary cause of train accidents. Between FY15 and FY23, an annual budget of ₹ 10,201 crore was set out for track maintenance. The ₹ 4,702 crore that was spent for the same purpose between FY05 and FY14 stands in stark contrast to this. Additionally, throughout this time, spending on high-grade rails has increased noticeably, more than tripling the amount spent previously to reach ₹ 13,746 crore annually.

Indian Railways has committed a significant sum of ₹ 1,78,012 crore on rail safety during the course of the present government’s nine-year term. When compared to safety expenditures prior to 2014, the average annual expenditure in this area has increased significantly, totaling ₹ 17,801 crore, or 2.5 times higher.

Railroads must rely on their own funds to pay for employee benefits including pensions and asset maintenance. The excess that railroads generate is not enough to cover their anticipated capital costs, which include purchasing waggons and constructing lines. Capital expenditures are financed by grants from the central government and extrabudgetary funds.

For feedback and suggestions, write to us at [e-mail]