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Read more about Budget 2018: A 15-year, Rs 35.3-trillion plan to put Railways on track on Business Standard. The scheme implies 92% annual rise in capex
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to put Railways on track
The Indian Railways is working on a Rs 35.3-trillion investment plan by 2032, pushing
up the capital expenditure for the ministry by around 92 per cent annually. Going by the
ambitious vision, the average annual investment, including capacity addition and
modernization, would touch around Rs 2.5 trillion, up from the Rs 1.31 trillion in 2017-
This long-term investment will also comprise the modernisation plan of ‘Vision 2030’
and also Rs 8.56-trillion investment target that former minister Suresh Prabhu had
kicked off starting 2014-15. “The Indian Railways will require approximately Rs 35.3
trillion by 2032 to create the requisite capacity and modernize the system,” the ministry
said in a report to the Parliamentary Standing Committee. The Railways, under Piyush
Goyal, has already started the work, aiming to achieve at least 4000 km electrification
per year in the coming years.
budget 2018 India : The capex for Railways during 2015-16 and 2016-17 were Rs
935.2 billion and Rs 1.21 trillion, respectively, posting a significant increase in the recent
As per the latest plan, railways freight share may zoom from 33 per cent now to around
47 per cent. It has also set a target of increasing the passenger kilometre to 3.3 trillion
PKM in 2030, from about 1.13 trillion PKM now. While the completion of dedicated
freight corridors would segregate freight and passenger traffic on high density routes,
speed of freight trains will increase from 25 km per hour (kmph) to 100 kmph.
With this, train speed is expected to be increased to 160-200 kmph in order to ensure
better intercity travel up to 500 km in three to four hours. “In the ten years starting
from 2020 to 2030, we are targeting more than 4000 km of new lines, doubling of
10,000 km and almost 100 per cent electrification,” an official said.
Asset monetisation will be one of the key revenue sources with the share of non-fare
revenue likely to go up to almost 20 per cent from the current 4 per cent range in the
next 12 years. In addition, the upcoming Budget may announce overhauling of the
signalling system and implementation of the European Train Control System (ETCS)
technology. This could cost the Railways around Rs 600 billion to cover the entire
country. Also, a Rs 1-trillion plan has been lined up for commercial development of
Of the Rs 8.56 trillion lined up for the first five years of Vision 2030, Rs 4 trillion has
already been invested. A majority of this will go towards network decongestion,
including freight corridor and electrification, network expansion and safety. In fact, over
the next couple of years, at least 8,000 km of old tracks will be replaced, at an estimated
cost of Rs 100 billion.
Around 30 per cent of the Rs 8.56-trillion capex for five years is expected to come from
budgetary, 28 per cent from debt, and about 15 per cent through internal generation.