The Indian Railways is set to get a capital expenditure push of Rs 2.92 lakh crore in the financial year 2023-24, 16.6 percent higher than the budgeted capital expenditure of Rs 2.45 lakh crore for the current financial year.
The annual expenditure will be funded through budgetary support of almost Rs 2.4 lakh crore in FY24, against revised budgetary support of Rs 1.591 lakh crore for FY23.
The Railways ministry's Internal and Extra Budgetary Resources (IEBR) have fallen to Rs 52,783 crore in 2023-24 from Rs 95,943 crore in 2022-23. IEBR includes funds raised through various financing sources, including funds raised through IRFC for capex deployment.
The funds will be spent on building railway tracks, wagons, trains, electrification, signalling, and developing facilities at stations while focusing on safety.
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"The Indian Railways capital outlay has been set at Rs 2.40 lakh crore, highest ever; 9x of what was in 2013," Finance Minister Nirmala Sitharaman said in her Budget speech on February 1.
The Railways needs funds for a number of projects including laying of new lines, gauge conversion, electrification, and signalling, apart from improvement in rolling stock.
The Railway Ministry is targeting 100 percent electrification of its network by 2023 and laying of at least 2,000 km of new tracks, as well as rolling out new Vande Bharat trains.
Vande Bharat Trains
Railway Minister Ashwini Vaishnaw on February 1 said that the Indian Railways has ramped up the production of Vande Bharat trains in the country.
"We will be rolling out 2-3 Vande Bharat trains every week by the end of 2023-24, which will be used throught the country," Vaishnaw said.
He added that the production of Vande Bharat trains will now take place in three more locations--Rail Coach Factory at Sonipat in Haryana, Modern Coach Factory at Raebareli in Uttar Pradesh and Marathwada Rail Coach Factory in Latur, Maharashtra.
The government plans to gradually replace all existing high-speed trains, including the Rajdhanis and Shatabdis, with the Vande Bharat, which will take up the speed to over 180 kmph on all major routes from a maximum of 160 kmph at present along limited routes.
Around 100 Vande Bharat trains were expected to be produced in 2023-24.
The minister added that the use of Vande Bharat trains on metro project is also being discussed at the moment.
"The production and design will of Vande Bharat metro projects will be completed in 2023-24 and we hope to start rolling out these metro projects in 2024-25," Vaishnaw added.
He added that the speed of Vande Bharat metro project will be around 120-130 kms and will be rolled out to connect major cities.
The minister also said that a Hydrogen powered train will be indigenously built in India by December 2023. The government is looking to launch hydrogen powered trains at popular tourist destinations like Shimla.
Order for wagons
The Central government is also looking at a new order for wagons in order to increase the Indian Railways freight carrying capacity, the Railway Minister said.
Last year, the Central government had announced a mega order of more than Rs 31,000 crore for the purchase of 90,000 wagons to transport coal, cement, and food grains, among other goods, to achieve a loading target of five million tonnes per day.
Titagarh Wagons, Texmaco Rail, Hindustan Engineering Industries, Commercial Engineer, and Oriental Foundry were the five companies that were awarded contracts worth Rs 23,500 crore to supply 60,000 wagons to the Indian Railways by 2025-26.
Cargo segment continues to grow; passenger segment surpasses pre-COVID levels
Indian Railways has budgeted to carry 7,475.17 million passengers in fiscal 2023-24, which is lower than the 8,593.79 million passengers the Indian Railways had targeted in 2022-23.
As per the government's revised estimates the Indian Railway will miss its target that was set in the Budget for 2022-23 and will end up carrying 6,564.81 million passengers in current financial year.
Despite carrying signifantly lower passengers than estimated in the Budget for 2022-23, the Indian Railways has surpassed its Budget estimate for revenue earned from the passenger segement.
The national carrier is on track to earn Rs 64,000 crore from its passenger segment in 2022-23, against the estimate of Rs 58,500 crore set in the Budget of 2022-23.
The higher revenue from passenger segment is on accout of higher ticket prices and removal of discounts following the COVID-19 pandemic.
For the last two years, Indian Railways saved majorly after it stopped the majority of concessions offered to passengers, including a hefty subsidy to the elderly. It has also saved on account of electrification of its routes.
"The Indian Railways saw a significant growth in its passengers travelling in AC 3 Tier which contributed to the growth in revenue in 2022-23," a senior government official said.
In 2022-23, the Indian Railways earned Rs 19,309.6 crore from the sale of AC 3 Tier tickets as against Rs 12,225.21 crore earned in 2021-22. Sales of AC 3 Tier ticket was the largest segment for the Indian Railways in terms of revenue in 2022-23.
On the freight side, it has set a target of carrying 1,600 million tonnes of cargo in fiscal 2023-24. The Indian Railways has set a revenue target of Rs 1.795 lakh crore for FY24, 8.8 percent higher compared to FY23.
Till December 31, the transporter had earned Rs 1.2 lakh crore from freight, marking a growth of 16 per cent year-on-year. 1109.38 mt of goods were transported in FY23 against last year’s loading of 1029.96 mt, keeping overall growth at 8 per cent.
Indian Railways expects to end this fiscal with total revenue of Rs 2.645 lakh crore.
Operating ratio target of railways for 2023-24 set at xx percent
The operating ratio for FY24 is proposed at 98.45 against 96.98 set for 2022-23. As per the revised estimate of the government, the Indian railways operating ratio for 2022-23 has come out at 98.22.
Operating ratio is measured as the amount spent by the transporter (Rs xx) for every Rs 100 earned by it.
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