Railways on The Right Track

Context: Recently released draft of the National Rail Plan (NRP) elucidates how Indian Railways must evolve, in terms of both capacity and the financing needed to build that capacity.

Long-term plan to address future challenges of Railways: under the draft of the NRP

• Develop railways based on patterns of passenger and freight traffic:
  • Development based on passenger traffic: Focus on 20-odd High-Density Networks (HDN) and Highly Utilized Networks (HUN) which constitutes for around 65% of passenger traffic and is expected to rise to around 69 % by 2031 -
    • By 2031, 30 % of the HDN and HUN will be operating at above 100 % capacity.
  • Development based on freight traffic: Increase share of freight transport (at present at 30 %)
    • Shifting freight mix (from bulk commodities such as coal, iron ore, food grains and fertilizers) towards container traffic.
    • Increasing operating speed and reducing tariff: will help increase the share of freight to 45 %.
• Increase capital expenditure(capex): of Rs 16.74 trillion between 2022 and 2031 on track and terminal infrastructure. (60-66 % of total capex should be reserved for expanding the rail network)
• Improving “modal share” of railways: by -
  • Focus on dedicated freight corridors: Already two such corridors are under implementation, and 3 more find a place in the National Infrastructure Pipeline (NIP). 
  • Focus on high-speed rail projects: As mentioned in NIP.
• Focus on extra-budgetary resources for funding: Since the budgetary allocation and retained earnings will not be enough.
  • By mobilizing private capital and giving due importance to financial viability of the projects.

Conclusion: In sum, the strategy provided by NRP is “Build more, build faster, but above all, build smarter.”