Prioritising a passenger-first route

In line with its current growth trajectory, Indian Railways could receive a jump in capital expenditure (capex) allocation in the upcoming 2025-26 Union Budget – a potential rise from about Rs 2.65 lakh crore in the current fiscal year to nearly Rs 3 lakh crore.

The Railways Finance Directorate is not optimistic about a big rise. However, irrespective of the extent of this rise, the requirement for capacity augmentation remains a grim ground reality. Passenger amenities for common rail users, punctuality in schedules, and goods movement patterns are not very encouraging.

The sector has witnessed a six-fold increase in capex since 2014, while a troubling stagnation in infrastructure capacity has been noted, particularly from 2023. This stagnation is starkly highlighted by the current fiscal, where the freight traffic growth rate has notably decreased compared to the previous three years. The freight was 1,233 million tons (MT) in 2020-21 which increased to 1,418 MT in 2021-22, 1,512 MT in 2022-23, and 1,597 MT in 2023-24. In 2024-25, the figure is estimated to touch 1,630 MT, signifying a slower growth rate compared to the previous years.

The higher allocation is expected to be spent in capacity enhancement projects such as laying new tracks, upgrading signalling systems, and buying rolling stock. The focus in FY26 will be on commissioning upgraded railway stations, launching modern trains, and decongesting the network. Currently, a considerable portion of capex has been allocated to less productive infrastructure projects such as the upgradation of railway stations which, while essential, should have been linked to a more comprehensive brownfield monetisation strategy to support Operations and Maintenance (O&M) expenditures.

There is an alarming absence of a clear policy focused on monetising the O&M of railway stations, jeopardising potential revenue streams. The introduction of the Vande Bharat trains, aimed at enhancing average train speeds, has unfortunately coincided with a dramatic decline in the punctuality of passenger services. Neither freight nor passenger services have shown improvement in average speeds.

The Railways has launched 34 pairs of semi-high speed Vande Bharat trains; equipped to run at a maximum speed of 160 kmph, these could run only at 130 kmph because of safety precautions. The operation of Vande Bharat Sleeper trains, with improved amenities, is also expected this year. The maximum train speed was 160 kmph in 2014. However, it has been reduced to 130 kmph due to safety concerns after a spate of accidents and derailments.

Slowing down

While the rail freight share is not increasing despite the heavy flow of funds, the speed of freight trains is also abysmally low at 40-50 kmph. The Railways’ plan to increase the maximum speed to 160 kmph for all premier trains – after the upgradation of signalling and safety measures like Kavach – is being implemented. Barring a few premier services such as Rajdhani, Duronto, Shatabdi, and Vande Bharat, nothing much has changed for the majority of other mail/express train services. Hygiene, quality of catering, and availability of confirmed tickets for common passengers are still a cause of worry.

The Railways’ periodic cleanliness drives have made a mark in stations but onboard conditions have not improved. The long-anticipated rail route connecting the Kashmir valley to the rest of the country has also raised significant planning concerns. The much-delayed bullet train, expected to run between Mumbai and Ahmedabad, is likely to get enhanced budgetary support to speed up the work in the Mumbai-Ahmedabad High-Speed Rail Corridor.

In FY25, Railways had planned an investment of Rs 21,000 crore for the bullet train project. Earnings for the Railways have topped Rs 2.04 lakh crore in the current financial year which includes Rs 58,927.38 crore from coaching, Rs 1.33 lakh crore from goods, and another Rs 7,442.78 crore from sundry (mainly parking, catering, and advertisements). Another Rs 5,278.34 crore was earned under the ‘other coaching’ head which includes revenues from parcels, luggage, and wharfage charges.

Industry experts attribute challenges ahead of the sector primarily to a deviation from the National Rail Plan, a strategic framework intended to guide the development of the rail transport sector. Railways is targeting an operating ratio of 98.22% by the end of FY 2024-25. If successful, this will result in a net revenue of Rs 2,800 crore. The surplus revenue could be ploughed back into the development funds and the Rashtriya Rail Sanraksha Kosh.

(The writer is an independent journalist)