Rail Budget in India Ramps Up Investments After Decades of Neglect

Mukesh Buch
26 Feb, 2015
New York City

Indian Railways in its latest budget announced investments in modernising tracks, expanding network and invest in improving passenger comfort and facilities at stations.

Indian Railways in its latest budget announced investments in track modernization, network expansion and improve passenger comfort and facilities at stations.

The fourth-largest rail network in the world operating 12,000 trains a day has suffered from the chronic underinvestment in the last two decades.

In the current budget, railways minister Prabhu departed from the past practice of making new train announcements and focused on improving existing infrastructure and improve efficiency of the rail network.

Minister Prabhu plans to invest as much as $137 billion and expand the network that will reach far corners of India including sensitive border regions in the North East.

Railways in India have been neglected from decades of underinvestment and neglect and lacked basic facilities at stations.

The recent decline in diesel prices has given the government a rare chance to invest and accelerate the network expansion.

Railway Minister Suresh Prabhu estimated freight revenues in the next fiscal year beginning in March to increase 20% to ₹1,210 abaj and passenger traffic is expected to increase 16.7% to ₹1,840 abaj.

The government plans to spend nearly ₹2,000 abaj or $138 billion in the five-year plan to expand network and decongest bottlenecks at several junction stations.

Railways plan to increase track capacity by 14% to 138,000 km and operating ratio to edge lower to 88.5% from the current year 91.8%.

Passenger capacity is estimated to increase to 30 million from the current 21 million and annual freight capacity to jump to 1.5 billion ton from 1 billion tons in the next fiscal year.

Minister Prabhu also said that Indian Railways will seek ₹40,000 or nearly $6.5 billion from the central government for investments and also seek ₹17,000 crore or $3 billion from the market to fund its short term needs.