Budget 2024: Indian Railways’ Path to Affordable Travel and Diversification

The Union Budget 2024 has generated significant anticipation, particularly regarding its implications for the Indian Railways. Experts are hopeful that this budget will focus on diversifying revenue streams and making travel more affordable for the public. As India aims to compete globally in terms of connectivity and infrastructure, the role of the Indian Railways becomes even more crucial.

Current Scenario and Expectations

India is on the path to competing with the best in the world in terms of connectivity. The benefits of enhanced connectivity are manifold, including the promotion of spiritual tourism, improved mass transit systems, and a boost in GDP through the development of industrial corridors.

Harsh Varshneya, Principal Architect at STHAPATI, emphasized the broader benefits of enhanced connectivity, stating, “India is on the path to competing with the world’s best in terms of connectivity, reaping both direct and indirect benefits for our nation. These include the promotion of spiritual tourism, enhanced mass transit systems, improved outreach across our vast motherland, and a boost in GDP through the development of industrial corridors.”

Focus on Sustainability

A key aspect of the upcoming budget is the emphasis on sustainability and green energy. Varshneya highlighted the importance of progressing towards net-zero and the government’s initiatives to harness green energy. These efforts are crucial for meeting the growing needs sustainably and ensuring a prosperous future.

Urban Mobility and Infrastructure

India is poised for significant progress in various infrastructure sectors. The momentum from the last budget is set to continue, with urban mobility projects meeting global standards. Over the next five years, there will be a concerted push to improve Indian infrastructure and services, aiming to enhance passenger experiences and boost satisfaction.

Freight and Logistics Transformation

The industrial sector in India is witnessing rapid growth, with more international companies setting up bases in the country. This growth is expected to transform freight and logistics. The urban mobility infrastructure and transport bases are anticipated to resolve the last-mile problem, significantly increasing revenues.

Diversification of Indian Railways

Indian Railways, being the largest landowner in the country, has a unique opportunity to diversify its portfolio. By utilizing these lands to generate revenue while offering affordable rates to the public, Indian Railways can achieve strategic diversification, promising far-reaching benefits for both the railways and the public.

Insights from Experts

Aryaman Tandon, Managing Partner for Mobility, Energy, and Transportation at Praxis Global Alliance, shared his insights on the upcoming budget and its implications for Indian Railways. He highlighted the government’s commitment to advancing clean mobility and sustainability in Indian Railways.

“In FY24, the overall rail market stood at approximately US$ 31 billion, with rail logistics and transportation contributing US$ 22 billion and US$ 9 billion, respectively. In FY24, e-rail accounted for 66% of the total railway market and is expected to reach 85% penetration by FY30, valuing at approximately US$ 49 billion out of an expected total railway market of US$ 58 billion,” Tandon noted.

Budget Allocations and Growth

The budget allocations for Indian Railways have consistently increased, reflecting a compound annual growth rate (CAGR) of 12%. This growth, driven by the expansion of dedicated freight corridors (DFCs), high-speed rail (HSR) networks, and other infrastructural advancements, aligns with the objectives of the National Rail Plan.

Electrification and Sustainability Initiatives

Electrification remains a cornerstone of the sustainability strategy for Indian Railways. With 96% of the route kilometres (RKM) already electrified and 21 states achieving complete electrification, achieving 100% electrification in the upcoming Union Budget is crucial. Expanding solar power initiatives and developing hydrogen and biofuel trains are also key areas of focus.

Future Prospects

Tandon emphasized the pivotal nature of the upcoming budget for Indian Railways’ journey towards sustainability. With the right investments and initiatives, significant reductions in greenhouse gas emissions, energy consumption, and pollution levels can be achieved, setting a benchmark for global rail systems.

Conclusion

The Union Budget 2024 holds great promise for the future of Indian Railways, aiming for progress, sustainability, and affordability. With strategic diversification, enhanced connectivity, and a focus on green energy, Indian Railways is poised to become a global leader in sustainable transportation.