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Sansad TV: Perspective- Railway Budget

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Introduction:

Finance Minister Nirmala Sitharaman has allocated a capital outlay of Rs 2.40 lakh crore for the Indian Railways in the Union Budget 2023-24. This highest-ever outlay is about nine times the outlay made in Financial Year 2013-14. This record budgetary push is aimed at accelerating projects like introduction of hydrogen-powered wagons and trains, laying of additional tracks, electrification of the network, and revamping stations with better amenities for passengers. The maximum increase in allocation this year has been made for passenger amenities, which include redevelopment of stations with Rs 13,350 crore earmarked for this purpose. At Rs 37581 crore, the second highest increase in allocation has been proposed for railway’s rolling stock — trains, locomotives and wagons. Rs 30749 crore have also been allocated for doubling of railway lines. Railways is one of the key drivers of the PM GatiShakti scheme and the National Logistics Policy.

Importance of Indian Railways:

  • Indian Railways (IR) has the 4thlongest rail network in the world. It is a network of 70,000 km and runs about 21,000 trains, carrying 23 million passengers and 3 million tonnes of freight per day.
  • Government has set a vision of making railways a 100% safe, fast and reliable mode of transport for passengers and freight.
  • The plan is to modernise the entire network. The recent step of creating an Indian Railway Management Service will help in this objective.

Railways in Union Budget:

  • A total of Rs 2.40 lakh crore has been earmarked in capital expenditure for the Indian Railways in the Union Budget 2023-24. This is approximately nine times the amount spent in fiscal year 2013-14.
  • Capex will rise more over the next few years and the railway system will evolve as a national growth engine.
  • Increased private investment will be made in the infrastructure sector of the railways. The Infrastructure Finance Secretariat, which has been developed recently will support all stakeholders like roads, power, railways, and urban infrastructure which rely primarily on government resources.
  • The Union Budget 2023-24 is expected to benefit the middle-class sector since railways are not likely to increase passenger ticket or freight fares.
  • A comprehensive description of the Indian Railways’ budget estimates, allocations, revenue, and annual statements will be provided by the finance minister.
  • The Railway budget 2023 is likely to encourage the Make in India effort and to emphasise the importance of renewable energy.
  • By 2030, the Indian Railways aims to become a Net Zero Carbon Emitter. It intends to lower its carbon footprint and reliance on imported fuel, while saving foreign exchange.
  • In the coming three years, 400 new-generation Vande Bharat Express trains will be constructed and manufactured. Additionally, more money will be allocated for the new Vande Bharat trains and the sleeper-class Vande Bharat 2.0.

Recent phenomenon of private investment in Railways:

  • Opens opportunity for returns from investmentin Rail Projects.
  • Improved Infrastructure – It will lead to better infrastructure which in turn would lead to improved amenities for travelers.
  • People’s expectation has changed and we need to cope up with those so private investment is the way for providing higher services.
  • Lesser Accidents
  • Rails will remain the same, the signaling will remain the samebutt interface with public and rolling stock have a substancial change.
  • Augmentation of railway infrastructure and decongestion of the railways.
  • Ensure timely availability of Rail Infrastructure to the beneficiaries viz. Port, Industry and States.
  • Better maintenance and efficiency in implementation of projects.

 Challenges:

  • Absence of independent regulator in the railway sector. In the absence there are chances of litigation or other issues as cropped up in the road sector.
  • Government has water, river, health and education to look for and therefore limited finance available for railways.
  • No past experience in the PPP modelfor the implementation of projects for railways.
  • Trade Unions.
  • Affects socio-economic development: This will defeat the entire purpose of the system which is meant to serve the entire population of the country irrespective of the level of income
  • Accountability: Private companies are unpredictable in their dealings and do not share their governance secrets with the world at large.

Way Forward:

  • Privatisation of railways operations will require a new institutional frameworkwhere infrastructure will remain as a government’s monopoly while thewre would be a market of service providers.
  • It is important to modernize the railways, so measures must be taken to reimburse the social costs speedily so that resources of the railways is better allocated and facilities are upgraded from time to time.
  • Core Railways function scan be Corporatized rather than privatized.
  • However, unlike publicly traded companies, the government is the company’s only shareholder, and the shares in the company are not publicly traded.