Pulling Out of the Station

Context: The Budget has set Railways on track to raise revenues, meet expenses and invest in infrastructure.

Provisions for Railways in Budget 2021-22

• Push towards monetisation: As a part of National Monetisation Pipeline (NMP).
  • Monetisation of assets under Dedicated Freight Corridor (DFC): Like the Western and Eastern DFCs (to be commissioned by June 2022).
• Electrification targets: Target to complete 100% electrification of broad-gauge routes by December 2023 (66% has been completed as of February 2021).
• Modernisation of railways:
  • Introduction of vista dome coaches for tourist routes.
  • Expansion of critical safety measures and technologies: indigenously developed automatic train protection system to eliminate train collisions due to human error on high-traffic routes.
• Increase in capital expenditure: Budgetary support of Rs 1.07 lakh crore while the total planned capital expenditure is Rs 2.15 lakh crore. (gap to filled by railway initiatives) 
  • National Rail Plan (NRP), having a capital expenditure of Rs 16.7 lakh crore over the next 10 years.
  • Apart from budgetary resources, NRP will be funded by extra-budgetary resources like private sector participation and asset sales.
• Focus on Public-private partnership (PPP):  in routes like Sonnagar-Dankuni section of the DFC.
• Push for disinvestment: E.g. aims to complete the disinvestment of Container Corporation of India (Concor) by 2021-22.
• Steps to tackle decline in revenue:
  • Special loan of about Rs 79,000 crore from the overall government budget.
  • Cut in pension fund: To prevent the Operating Ratio (OR) have increased to 114% in 2019-20.

Challenges confronting Indian Railways

• Factors that warrant a push for monetisation:
  • Decline in revenue (due to COVID-19 lockdowns):  Passenger revenues have been pegged at the same level as was last year, while freight revenues are pegged 6% lower.
  • Decline in originating passenger numbers: only 1,129 million (in 2020-21) than a budgeted number of 8,792 million.
• Multiple targets to be met: Raising revenues, meeting essential expenses and investing in infrastructure.