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.