With the country’s railways infrastructure set for a massive revamp, the Indian Railways is likely to see its highest ever capital expenditure (capex) for 2021-22 in the upcoming Budget 2021. During the current financial year, the capex by the Indian Railways was pegged at Rs 161,042 crore, which is likely to grow in double-digits in 2021-22, if the finance ministry meets the Railway Board’s expectation.
The capital expenditure in Railways was vastly scaled up after 2014 (almost double the previous level) to address the accumulated backlog of infrastructure deficiency in the Railways, according to the government. As per the plan lined up by the Centre under the National Infrastructure Pipeline (NIP), the Railways sector is expected to see investment to the tune of Rs 11.43 lakh crore till 2024-25. Based on this roadmap, the sector was expected to see Rs 3.08 lakh crore in FY22. Total capital expenditure between 2014-20 was Rs 6 lakh crore, which was more than double of total expenditure during 2009-14.
“A lot of infrastructure projects are lined up. This includes new lines, doubling, tripling and electrification, overhauling of the existing signalling and telecommunication system, freight corridors, station redevelopment and introduction of modernized rolling stock,” said R Sivadasan, former finance commissioner with the Railways. The railways is expected to raise its market share in overall freight, from around 30 per cent now to 45 per cent in 2030.
Currently, the Indian Railways has taken up 498 Railway projects of 49,069 kilometre (km) length, costing Rs 6.75 lakh crore, which are in different stages of planning, sanction and execution. Out of this, 58 are considered as supercritical and 68 as critical projects. Besides, to increase the carrying capacity of passengers and ensure meeting the needs of the freight traffic, 247 doublings, 189 new lines, 522 traffic facilities and 55 gauge conversion works are sanctioned.
Interestingly, the share of extra-budgetary resources had increased over the years. The share of capex contributed by the Indian Railway Finance Corporation (IRFC) increased from 19 per cent of the total capex in 2014-15 to 48 per cent in 2019-20 and 70 per cent in 2020-21. Out of the total capex requirement of Rs 1.61 lakh crore for the year, IRFC is commissioned to lend Rs 1,13,567 crore.