Budget 2021 | Indian Railways' capex at record high; operating ratio improves

Scenic view of train traversing over the shimmering Aghanashini River near Kumta railway station in Konkan railway. (Image: Twitter @RailMinIndia)

As the Union Budget lined up the highest-ever capital expenditure (capex) plan of Rs 2.15 lakh crore for the Indian Railways for the financial year 2021-22, it showed an improved operating ratio of 96.15 percent for the year.

This means the national transporter is spending 96.15 paise to earn every Re 1. The revised estimate on operating ratio for the financial year 2020-21 was seen at 96.96 percent, as against 97.3 percent pegged in the last year’s Budget.

“The rise in capital expenditure is mainly due to an increase in allocation for new lines, doubling, traffic facilities and investment in special projects. We are going to invest heavily in dedicated freight corridors and high-speed rail projects too,” Suneet Sharma, chairman, and chief executive officer of the Indian Railways told Moneycontrol.

The year saw a 29 percent increase in capital expenditure compared to the budget estimate of Rs Rs 161,042 crore.  Out of Rs 2.15 lakh crore, Rs 1.07 lakh crore comes from gross budgetary support, Rs 7,500 crore from internal resources, and Rs 100,258 crore from extra-budgetary resources (EBR), including the funding from Indian Railways Finance Corporation (IRFC) which is to the tune of around Rs 70,493 crore.

Interestingly, for the current fiscal, the gross budgetary support from the government declined to Rs 29,250 crore in the revised estimate, as against Rs 70,250 crore in the Budget estimate. This led to an increase of Rs 45,275 crore on EBR from Rs 83,292 crore in budget estimate to Rs 1,28,567 crore in the revised estimate.

“This is a future-ready budget in line with the targets set by us under the National Rail Plan. We are in the process of fast-tracking DFC projects. The asset monetisation plans for DFC is also currently under discussion with Niti Aayog. Detailed project reports for new DFCs are also under preparation,” Sharma said. He indicated that the government will soon take a call on user-development fees to be charged on redeveloped railway stations.

The Budget had also lined up 1115 kilometer Kharagpur(WB) to Vijayawada(AP) East Coast Dedicated Freight Corridor, East-West Sub Corridor connecting Bhusaval(Mah) to Dankuni(WB) 1,673, and North-South Sub Corridor connecting Vijayawada(AP) to Itarsi(MP).