Last Updated: May 26, 2016
World Bank India country director
Last Updated: February, 2016
RAILWAYS SECTOR REPORT | January, 2016
The Indian Railways is among the world’s largest. Spread across 7,146 stations, the 64,600-km network enables the running of 19,000 trains on a daily basis. India's railway network is recognised as one of the largest railway systems in the world under single management.
The railway network is also ideal for long-distance travel and movement of bulk commodities, apart from being an energy efficient and economic mode of conveyance and transport.
The Government of India has focused on investing on railway infrastructure by making investor-friendly policies. It has moved quickly to enable foreign direct investment (FDI) in railways to improve infrastructure for freight and high-speed trains. At present, several domestic and foreign companies are also looking to invest in Indian rail projects.
The total approximate earnings of Indian Railways on originating basis during FY2014-15 were Rs 157,880 crore (US$ 23.68 billion) compared to Rs 140,761 crore (US$ 21.11 billion) during the same period last year, registering an increase of 12.16 per cent.
The total approximate earnings from goods during fiscal 2014-15 were Rs 107,074.79 crore (US$ 16.06 billion) compared to Rs 94,955.89 crore (US$ 14.24 billion) during the same period last year, registering an increase of 12.76 per cent.
The total approximate revenue earnings from passengers during the financial year 2014-15 were Rs 42,866.33 crore (US$ 6.43 billion) compared to Rs 37,478.34 crore (US$ 5.6 billion) during the same period last year, registering an increase of 14.38 percent.
The total approximate revenue earnings from other coaching amounted to Rs 4,035.56 crore (US$ 605 million) during fiscal 2014-15 compared to Rs 3,818.03 crore (US$ 572 million) during the same period last year, registering an increase of 5.7 per cent.
The total approximate numbers of passengers booked during the financial year 2014-15 were 8,227.99 million compared to 8,425.09 million during the same period last year, showing a decrease of 2.34 per cent. In the suburban and non-suburban sectors, the numbers of passengers booked during fiscal 2014-15 were 4,503.97 million and 3,724.02 million compared to 4,549.62 million and 3875.47 million registering a decrease of 1 per cent and 3.91 per cent respectively during the same period last year.
Currently, Indian Railways is focusing on finishing the capacity-augmentation projects that have the highest rates of return. There are 154 New Line, 42 Gauge Conversion, 166 Doubling and 54 Railway Electrification projects across the country with throw forward of Rs 285,652 crore (US$ 42.87 billion). For Railway Electrification projects, the throw forward as on April 1, 2014 had been estimated to be Rs 6,692 crore (US$ 1.0 billion).
Foreign direct investment (FDI) inflows into railway related components from April 2000 to September 2015 were US$ 652.2 million.
Following are some of the major investments and developments in India’s railways sector:
Minister of Railways Mr Suresh Prabhu has said that the Ministry of Finance has communicated a Gross Budgetary Support of Rs 40,000 crore (US$ 6.01 billion) for the Railway’s annual plan. Presenting the Railway Budget 2015-16 in Parliament, Railway Minister Mr Suresh Prabhu said Rs 1,645.6 crore (US$ 247.06 million) has also been provided as Railway’s share of diesel cess from the Central Road Fund.
The Ministry of Railways is focusing on its massive US$ 140 billion investment plan to modernise the railways and improve safety, performance and passenger amenities, as per Railways Minister Mr Suresh Prabhu.
The Ministry of Railways in November 2014 issued Sectoral Guidelines for permitting domestic/foreign direct investment (FDI) in construction, operation and maintenance in the following identified areas:-
i) Suburban corridors through public private partnership (PPP), ii) high speed train projects, iii) dedicated freight lines iv) rolling stock including trains sets and locomotive/coaches manufacturing and maintenance facilities v) railway electrification vi) signalling system vii) freight terminals viii) passenger terminals ix) testing facilities and laboratories x) non-conventional sources of energy xi) railways technical training institutes xii) concessioning of standalone passenger corridors (branch lines, hill railways etc.) Xiii) mechanised laundry, xiv) rolling stock procurement, xv) bio-toilets, xvi) technological solution for manned and unmanned level crossings, xvii) technological solutions to improve safety and reduce accidents. The guidelines will encourage foreign investors for making investment under ‘Make in India’ programme. An ‘Investors Meet’ was also held in December 2014 to encourage foreign investors in making investments.
According to Mr N Sreekumar, Chief General Manager of Container Corporation of India Limited, the Indian Railways is coming out with a new rating system. Addressing an event organised by Indian Institute of Logistics, Mr Sreekumar said the government is going to restructure the railway board. He also stated that the total logistics sector in India would undergo a transformation with the east and west freight corridor coming into being.
Promising "watershed development" of Indian Railways, Minister of Railways Mr Suresh Prabhu announced a series of reforms in the rail sector, including the introduction of remote sensing technology to improve safety, rail bookings on mobile phones and wi-fi at railway stations.
The Indian Railway network is growing at a healthy rate. In the next five years, the Indian railway market will be the 3rd largest, accounting for 10 per cent of the global market.
Exchange Rate: INR 1 = US$ 0.0150 as on December 17, 2015
References: Press Releases, Department of Industrial Policy and Promotion, Press information Bureau, Media Reports
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Last Updated: May 26, 2016
World Bank India country director
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