Budget 2022: Railways to see jump in allocation, targets 100% electrification by Dec 2023

Union Finance Minister Nirmala Sitharaman tabled the Economic Survey 2021-22 on January 30 in Lok Sabha. The survey said that Indian Railways is set for a jump in its allocation pushing for rapid growth in Capital expenditures (Capex) for the national transporter to make it future-ready and an engine of national growth.

The survey said the influx of funds is needed to not only meet the passenger demand but increase the modal share of railways in freight to 40-45 percent from the present 26-27 percent as laid down by the National Rail Plan (NRP).

The NRP lays down the road map for capacity expansion of the railway network by 2030 to cater to growth up to 2050.
“The target of 40-45 percent modal share for railways is necessary from the perspective of sustainability and also from the national commitments made globally for reducing emission levels. Unlike growth, which is linear, capacity grows in surges (sawtooth curve) depending on project completion timelines,” the survey said.

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According to the NRP, the freight ecosystem is expected to grow from the present level of 4700 million tonnes (MT) to 8200 MT by 2030. “Up to 2014, CAPEX on the railway was barely Rs 45,980 crore per annum and consequently the railway was characterized by high levels of inefficiency and highly congested routes unable to meet the growing demand,” it said.

Post-2014, a conscious effort was made to improve the railway sector by substantially increasing the CAPEX. The CAPEX outlay for 2021-22 is Rs 2,15,000 crore which is more than five times the 2014 level. As more projects are taken on hand and several sources of capital funding are developed, the CAPEX will increase further in coming years and the railway system will emerge as an engine of national growth, it said.

According to the monthly data, Indian Railways passenger traffic is still much below the pre-pandemic levels. Indian railways recorded an almost 16 percent increase in freight loading as compared to the corresponding period during the pre-pandemic year (2019-20), where the freight loading was 888.88 MT. The Economic Survey 2021-22 expects the economy to grow by 9.2 percent during the current financial year, indicating a recovery to the pre-pandemic level.

The survey further said that the Indian Railways (IR) has set a target of 100 percent electrification of its network by December 2023. To achieve this target with the creation of other infrastructure in the sector, the government has increased the CAPEX by fivefold in the last seven years. The survey claims that IR is targeting 100 percent electrification of its network by December 2023, upgradation of Delhi-Mumbai and Delhi-Kolkata corridors to 160 kmph, and also the elimination of level crossings on the Golden Quadrilateral and Golden Diagonal routes.

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"An average of 1,835 track km per year of new track length has been added through new-line and multi-tracking projects during 2014-2021 as compared to the average of 720 track km during 2009-14," the survey said. It mentioned that the safety of the passengers and safe upkeep of railways assets is the topmost priority of IR. "With a continuing focus on the safety of passengers the number of consequential train accidents has come down from 59 in 2018-19 to 55 in 2019-20 (pre-Covid) and further to 22 in 2020-21," it said.

"Despite Covid-19 pandemic, revenue earning freight loading (excluding loading by Konkan Railway Corporation Ltd. (KRCL) was 1230.9 million tonnes in 2020-21 as compared to 1208.4 million tonnes during 2019-20. Passengers originating were 1,250 million in 2020-21 as compared to 8,086 million in 2019-20," it further said.

To provide better amenities, the IR has embarked on providing Wi-Fi internet services at all stations (excluding halt stations) and as of December 5, 2021, a total of 6,087 Railway Stations have been equipped with the facility. In addition, projects connecting difficult terrain such as the Rishikesh- Karnaprayag line as also the rail network to connect all capitals of northeast states are ongoing. Further, several infrastructure development initiatives are envisaged in the National Rail Plan (NRP) being prepared by the Indian Railways.

The plan envisages the creation of a future-ready railway system that is able to not only meet the passenger demand but also increase the modal share of railways in freight to 40-45 percent from the present level of 26-27 percent. As per the National Rail Plan, the freight ecosystem is expected to grow from the present level of 4,700 MT to 8,200 by 2030.

"At present, the railway capacity is barely able to carry 1,220 MT which is around 26-27 percent of the modal share. The Plan provides a pipeline of projects, which on completion will increase railway capacity to capture 45 percent of freight traffic," the plan said.

To prevent further bleeding away of modal share, railway capacity enhancing projects have been categorized as `Super Critical` and `Critical`. A total of 58 projects have been identified as `Super Critical` and are targeted for completion by December 2022. About 68 projects have been identified as `Critical` and have been targeted for completion by March 2024.

"These projects are focused on increasing capacity on routes that serve major mineral, industrial hubs along with ports and major consumption centres," it said. "The next 10 years will see a very high level of CAPEX in the railway sector as capacity growth has to be accelerated such that by 2030 it is ahead of demand. As more projects are taken on hand and several sources of capital funding are developed, the CAPEX will increase further in coming years and the railway system will emerge as an engine of national growth," it added. 

With inputs from agencies

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