The Right Track

Context: An analysis of the provision related to Railways in the Budget and associated issues.

Provisions related to Indian Railways in Budget 2021-22:

• National Rail Plan (NRP) for 2030: Aims to increase the share of railways in freight, rectifying the pre-Independence and post-Independence bias, and develop capacity that will cater to demand in 2050.
  • Maps the existing railway network on a GIS platform and identifies gaps.
  • Reiterates policy issues and lists operational procedures and constraints (wagon policy, haulage charges, terminal charges) within Indian Railways (which can be improved by breaking down silos).
  • Analysis of the existing network, with additions (of National Infrastructure Pipeline) also built-in.
• Commissioning of Western dedicated freight corridor (DFC) and the Eastern DFC: by June 2022; Parts of DFC will be in public-private partnership (PPP) mode. 
  • Aims to increase the speed of freight trains and free up capacity.
  • Other Proposed Corridors: East Coast corridor (Kharagpur to Vijaywada), an East-West corridor (Bhusaval to Kharagpur/Dankuni) and a North-South corridor (Itarsi to Vijayawada).
• Electrification of all broad-gauge routes by December 2023.
• Ensuring Safety and passenger amenity measures.

Associated issues with Railways sector:

• Low Operating Ratio (OR): 0.59 for freight and 1.92 for passenger traffic. (NRP 2018-19)
  • Cross-subsidization: by keeping low passenger fares and high freight rates.(bias towards passenger)
  • Preference to passenger trains over freight trains on tracks: resulting in low speed of freight trains (average 24 Km/hour) and very high transit time; which also raises multi-modal issues.
• Over-utilization of capacity: High-Density Routes (HDNs) and Highly-Used Networks (HUNs) carry 80% of the traffic, and there are sections where capacity utilization is more than 100%.

Way forward:

• Gauge conversion and electrification of HUNs:  used primarily for passengers.
• Increase rail share in total freight carried to 44%: by increasing average speed (to say 50 km/hour) and reducing costs (say, by 30% ) (Western and Eastern DFCs will help in achievement of both).
• Bring new tracks and investments: as supplements to DFCs, HDNs and HUNs, terminals and sidings.
• Reduction of tariffs for bulk commodities: like coal, iron ore, raw material for steel and fertilizers.
• Since these are traditional bulk commodities for railways and reduction in cost will not have much impact in increasing the share on railways.
• But for other commodities, reduction in cost will attract commodities to prefer using railways.