Indian Railways (IR) is currently on a path of transformation to make the sector future-ready. The government has been accelerating this transformation through the introduction of various favourable policies. IR has witnessed a paradigm shift in focus towards new technologies, customer service enhancement, efficient passenger operations and better freight services. IR’s freight operations have witnessed substantial growth since August 2020 as the Covid-induced restrictions were eased throughout the country. It took various initiatives to resume passenger operations by opening up routes on its network in a phased manner. Further, infrastructure development works have continued during the pandemic, due to which IR was able to continue its operations without any hindrance. In a recent media interaction, Suneet Sharma, Chairman and CEO, Railway Board spoke about the impact of Covid-19 on IR’s operations, new initiatives being taken by IR to ensure efficient operations and the road ahead for the sector. Excerpts…
Impact of Covid-19
The Covid-19 pandemic has had an adverse effect on IR’s operations. During the nationwide lockdown imposed in March 2020, IR had to suspend all its passenger services, which were resumed gradually in the latter half of the year. Its operations were hit once again in April-May 2021 due to the second wave of the pandemic and it was once again forced to limit its passenger services owing to local restrictions on the movement of passengers throughout the country.
IR witnessed positive growth in the freight segment with the gradual easing of restrictions. Since August 2020, IR has recorded a higher year-on-year freight loading every month. The pandemic also allowed IR to complete many of its under-construction infrastructure development projects due to a significant fall in traffic. Some of the key projects completed during the pandemic are the Chindwara-Nagpur gauge conversion; Haridaspur-Paradeep new line; Bhopal-Bina Third line; Laksar-Haridwar line doubling; and Delhi-Jaipur-Udaipur electrification. Meanwhile, many other infrastructure development projects are expected to be completed in the second half of 2021.
IR has been coming up with new initiatives and programmes to ensure greater efficiency in its operations. One such mega programme introduced by IR is the development of a dedicated freight corridor (DFC), which will provide a much-needed impetus to the freight segment. Work on the DFC has been progressing in full swing, with 1,138 km commissioned as of March 2021. Further, by December 2021, the Kanpur-Khurja area under the eastern DFC in Uttar Pradesh is expected to be connected with the Kandla, Mundra and Pipavav ports in the western DFC through the Khurja-Rewari link. Meanwhile, the capital expenditure incurred on the DFC project till March 2021 stood at Rs 530 billion.
In a bid to enhance freight movement, three new DFCs have been proposed in the Union Budget 2021-22. These are the East Coast Corridor (1,115 km), the East-West Sub-Corridor and the North-South Sub-Corridor (975 km). The East Coast Corridor will operate from Kharagpur in West Bengal to Vijayawada in Andhra Pradesh. The East-West Sub Corridor will operate from Bhusaval in Maharashtra to Dakuni in West Bengal with a total length of 1,673 km and from Rajkharasawan in Jharkhand to Andal in West Bengal with a total length of 195 km. Meanwhile, the North South Sub-Corridor will operate from Vijayawada in Andhra Pradesh to Itarsi in Madhya Pradesh with a total length of 975 km. These routes are freight-intensive and have high iron ore, coal, cement and steel traffic. The detailed project reports (DPRs) for these projects are under preparation.
With the aim of facilitating passenger movement, seven new high speed rail corridors have been proposed and their DPRs are under preparation. These are Delhi-Agra-Varanasi (865 km), Varanasi-Patna-Howrah (760 km), Delhi-Jaipur-Ahmedabad (886 km), Delhi-Chandigarh-Amritsar (459 km), Mumbai-Nashik-Nagpur (753 km), Mumbai-Pune-Hyderabad (711 km), and Chennai-Bengaluru-Mysore (435 km) corridors.
IR is also undertaking various digital initiatives progressively. The sector is syncing itself with information technology in a big way to enable digitalisation and automation. Some of the key digital initiatives are satellite-based tracking of trains, which is operational in 6,500 locomotives (as of February 2021); the freight business development portal; an upgraded passenger e-ticketing website; smart yards, including machine-aided fault diagnostics and repairs in 40 freight yards. Other initiatives such as the predictive maintenance regime, human resource management system, 100 per cent procurement on digital platforms through IREPS and GeM, and Wi-Fi connectivity at railway stations have also been undertaken.
Another important initiative to improve the freight business and provide a push to farmers is the commencement of Kisan Rail, under which 157 trains are being operated on eight routes transporting more than 49,000 tonnes of commodities. Kisan Rail also provides 50 per cent subsidy in freight. Doubling the average speed of freight trains from 23 km per hour to 46 km per hour, completing the pending critical infrastructure and safety work, maintaining the supply chain and ensuring the availability of essential items are some of the other key focus areas of the railway sector.
Further, a major initiative has been undertaken by IR to boost rail connectivity in the north-eastern region of the country. Under this initiative, the entire rail network of the north-eastern states is being converted to broad gauge. Meanwhile, major cities in Assam, Tripura and Arunachal Pradesh are being connected by rail.
IR has also taken forward the Aatmanirbhar Bharat initiative introduced by the Government of India as imports in the procurement of railway equipment dropped from 5.6 per cent in 2013-14 to 1.5 per cent in 2020-21. Electric locomotive production in the country increased from 250 in 2014 to 700 in 2020. Further, more than 97 per cent of the equipment required for the production of electric locomotives is being sourced domestically. IR has also started manufacturing smart coaches, which provide additional features like announcements, information on trains approaching different stations and air-conditioning and temperature control.
The road ahead
Under the Union Budget 2021-22, the Ministry of Railways received an allocation of Rs 1,100.55 billion (budget estimates). The total traffic revenues in the budget estimates for 2020-21 stood at Rs 2,255.13 billion. However, the revised estimates of 2020-21 brought this figure down to Rs 1,461.84 billion due to the ongoing pandemic. The capex in the revised estimates of 2020-21 has been increased from Rs 1,610.42 billion (budget estimates of 2020-21) to Rs 1,616.92 billion. The total income projected in the budget estimate of 2021-22 stands at Rs 2,174.6 billion, which is Rs 708.51 billion more than the revised estimate income of 2020-21. The highest expected earnings are from the freight segment (63 per cent), followed by passenger revenue (28 per cent). The total budget estimate expenditure for 2021-22 stands at Rs 2,174.60 billion. IR spends most on salary and allowances of employees (42.7 per cent), followed by pensions (24.5 per cent). Further, it is expected that IR will be able to achieve an operating ratio of 96.15 in 2021-22.
The total capex allotted to IR in 2021-22 stands at Rs 2,150.58 billion, Rs 533.66 billion (33 per cent) higher than the revised estimates of 2020-21. This is the highest-ever capex allotted to the railways. The national projects of Jammu & Kashmir, Himachal Pradesh, Uttarakhand and the north-eastern region have been allocated the highest-ever outlay of Rs 129.85 billion (72 per cent higher than the revised estimates of Rs 75.35 billion for 2020-21). In a major development, the gross budgetary support has increased from Rs 316.17 billion in 2014-15 to Rs 1,073 billion in 2021-22.
IR has set a target of completing 2,400 km of new lines, doubling and gauge conversion projects – 300 km of new lines, 1,600 km of doubling sections, and gauge conversion of 500 km. In addition, the electrification of 6,000 km of lines is to be completed in financial year 2022. Rolling stock production of 905 electric locomotives, 6,600 coaches and 12,000 wagons has also been targeted for 2021-22.
Going forward, the outlook for the sector remains positive given the big-ticket upcoming projects. It is undergoing a major transformation to improve its freight operations and align itself with the targets of the National Rail Plan. It is also laying increased focus on enhancing railway passenger capacity. With the railway sector receiving immense budgetary support from the government in 2021-22, it is expected to improve its infrastructure, productivity and efficiency in the coming years.