This year’s Union Budget will be presented under a tough external environment with India emerging as the shining star in an otherwise bleak background.

The Railway portion of the Budget for FY23, which was presented in February 2022, estimated a total annual expenditure of ₹4.7-lakh crore (₹2.3-lakh crore opex and ₹2.4-lakh crore capex).

The estimated expenditure of ₹4.7-lakh crore was met with ₹2.3-lakh crore coming from traffic receipts; ₹1.3-lakh crore from general budget and ₹1.1-lakh crore from borrowings. Staff costs with pension commitments accounted for more than 70 per cent of opex which is worrisome. It is also imperative that debt financed projects yield positive returns.

Current trends of performance indicate buoyancy both in passenger and freight segments, with performance expected to be better than estimated in the budget for FY23. While the resumption of train services post Covid, increase in passenger revenues and coal-based electricity production – accounting for around 50 per cent of revenues – has lifted freight earnings for the sector.

Commissioning of infrastructure projects like multi-tracking, electrification and signalling up-gradation, together with partial commissioning of Dedicated Freight Corridors (DFC) has also helped, as ports on the Gujarat coast are now connected to the Western DFC.

Twin challenge

Electrification and open access procurement of electricity has given much needed relief by reducing the energy bills.

With the expected decrease in production of coal-based electricity, Railways will have to come up with a plan to meet the twin challenges of finding replacement of coal – transportation of which currently accounts for around 50 per cent of revenues – and simultaneously increase the market share of Railways in the overall transportation throughout the country as envisaged in the National Rail Plan (NRP).

On the other hand, expansion of the rail network at a higher rate has become a necessity to make up for the relative shortfall vis-a-vis highways in the recent years. Highway lengths, which used to be at par with Railways at the turn of century, are almost double today at around 1,50,000 km.

Commissioning of 100 Gati Shakti terminals is expected to provide a boost to Rail borne freight by taking care of first/last mile connectivity issues.

The introduction of Vande Bharat express trains in the country needs to be accompanied by suitable maintenance infrastructure like supporting overhead electrification and signalling infrastructure together, erecting adequate boundary walls, etc. The call for increase in average speeds will require elimination of rail-road crossings and permanent speed restriction zones on account of curves and bridges. Measures for improvement in touch and feel areas both inside the trains and at railway stations are also expected.

Mission 3,000 MT

To meet the target of Mission 3,000 million tonnes by 2027, a CAGR of 14 per cent in originating loading is called for.

Railway uses 1/7th of the energy for transportation as compared to roadways and a higher proportion of traffic by Rail is essential to achieve environmental goals.

Station development scheme needs to revert back to financially prudent PPP mode from engineering, procurement and construction mode. Expeditious commissioning of Rail connectivity to Kashmir Valley, DFCs, Bullet Train, Char Dham and projects connecting capitals of North-East States are also awaited by stakeholders.

The author is retired GM, East-Central Railway. Views expressed are personal.