February 2023

The 2022-23 Budget has the highest ever allocations for the railways, with Rs 2.41 trillion assigned as central support. This is 49 per cent higher than the revised estimate of Rs 1.62 trillion for 2022-23. The transporter will need all those funds and its own internal resources, plus private investment, to support its ambitions going forward.

Indian Railways (IR) has major network expansions on the anvil, with Rs 318.5 billion allotted to new lines. It also has major plans with Rs 46 billion committed to gauge conversions, Rs 307.49 billion to doubling works, Rs 172.96 billion to track renewals, and another Rs 12.55 billion to bridges, tunnel works and approaches. The bullet train will require special tracks. The 400 new Vande Bharat semi-high-speed trains will also need special, elevated and reinforced tracks to run at the rated speeds. The dedicated freight corridor concept has been expanded as well.

There is also the drive to completely electrify the rail network, which will give IR a shot at becoming the world’s “greenest” railway. Around 400 large stations are to be redeveloped under the Station Redevelopment Programme. As of December 2022, redevelopment of 48 stations is in progress. Another 1,275 small stations have been identified for redevelopment under the Amrit Bharat Station Scheme. Along with construction, redevelopment also opens up prospects for facility management and commercial monetisation. As of December 2022, 22 Gati Shakti Cargo Terminals (GCT) have been commissioned. Another 125 applications for development of GCT terminals have been received, and 79 in-principle approvals have been granted. The railways are also designing and inducting more modern rolling stock, better locomotives and better passenger coaches, and undertaking research in hydrogen fuel-cells. It proposes to manufacture 35 hydrogen fuel-based trains, 4,500 newly designed automobile carrier coaches with side entries, 5,000 new Linke Hofmann Busch coaches and 58,000 wagons.

There is an enormous programme to digitise everything on both the customer and operational sides. Eventually, every train and every kilometre of track will also have the Kavach safety system installed. This should dramatically reduce the chances of collision. The railways should eventually be “smart” enough to track every train, and indeed every wagon in real time.

If all goes according to plan, IR will have a completely electrified, smart, green network, and use modern locomotives and wagons with much higher average speeds. It will have beautiful, clean stations with multiple facilities, and smart cargo terminals and warehouses. All cargo and tickets may be booked online. As a consequence, the logistics costs of moving goods and people will reduce significantly, making India a more competitive economy.

There are plenty of opportunities for private enterprise in this phase of renewal. Apart from large opportunities in multiple segments on the engineering and technology side, the government is looking at using the public-private partnership mode for freight corridors, station redevelopment and the GCTs, while retaining tight operational control of the whole system.

IR was hit hard by the pandemic, but it has bounced back. Freight traffic grew 15 per cent in 2021-22, crossing the 1,400 mt mark, the highest ever. The current fiscal (2022-23) looks set to achieve the freight loading target of 1,475 mt, with 1,243 mt moved during the April 2022-January 2023 period. Freight revenues reached Rs 1,354 billion, 16 per cent higher than in the corresponding period of 2021-22. Passenger traffic in 2021-22 rose 175 per cent off the low base of the pandemic, to reach 3.54 billion. During April 2022-January 2023, passenger traffic stood at 5.177 billion, having risen 101 per cent over the corresponding period of the previous fiscal year. Total passenger earnings for IR during April 2022-January 2023 stood at Rs 547.33 billion, an increase of 73 per cent over the corresponding period of the previous year. One of India’s oldest institutions could become a major enabler of India’s $5 trillion economy goal.