Last Updated: February 28, 2017
World Bank India country director
Last Updated: February, 2017
RAILWAYS SECTOR REPORT | February, 2017
The Indian Railways is among the world’s largest rail networks. Spread across 6,853 stations, the 108,706-km network enables the running of 11,000 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.
Freight earnings in August 2016 declined 3.66 per cent year-on-year to Rs 7,252.42 crore (US$ 1.08 billion), while freight loading stood at 85.36 Million Tonnes (MT).
Passenger earnings in August 2016 rose 4.53 per cent year-on-year to Rs 3,872.57 crore (US$ 577.45 million), while earnings from other coaching rose 3.10 per cent to Rs 338.45 crore (US$ 50.47 million). The total approximate numbers of passengers booked during August 2016 rose 1.87 per cent year-on-year to 701.28 million.
Gross Traffic Receipts of Indian Railways for the year ending March 2016 is estimated at Rs 167,834 crore (US$ 25.03 billion), as per Railways Budget 2016-17. Further, for FY 2016-17, Gross Traffic Receipts estimated at Rs 184,820 crore (US$ 27.56 billion), a growth of 10.1 per cent. Indian Railways has appointed Ernst & Young (EY) as a consultant to discover its advertising potential, which is in line with the Railway Budget proposal of increasing non-fare earnings to over Rs 5,000 crore (US$ 745.57 million) in five years.
Foreign Direct Investment (FDI) inflows into Railways related components from April 2000 to March 2016 were US$ 710.98 million.
Following are some of the major investments and developments in India’s railways sector:
The Union Cabinet approved the merger of Railway budget with the Union budget, which is expected to help initiate revenue mobilisation and capital expenditure measures from the beginning of the fiscal year.
The Cabinet Committee on Economic Affairs (CCEA) has approved nine projects worth Rs 24,374.86 crore (US$ 3.63 billion) for expansion of railway network and connectivity, which is expected to ease traffic bottlenecks and help the upcoming industries in the region and additional transport capacity to meet their requirements.
Mr Suresh Prabhu, Minister of Railways, has launched free Wi-Fi facility at eight stations of Mumbai suburban railway network, which will provide high speed access network to all railway users.
He has said that the investments by the Ministry in 2015-16 were double the average investment over the past five years. Presenting the Railway Budget 2016-17 in the Parliament, Mr Suresh Prabhu announced capital expenditure for 2016-17 at Rs 121,000 crore (US$ 18.04 billion), which will be implemented through joint ventures with states and developing new frameworks for Public-private partnership (PPP).
The state of Haryana has taken the lead among all states of India to partner with the Ministry of Railways in creating rail infrastructure, by formation of a Special Purpose Vehicle (SPV) between Haryana and Indian Railways, as announced by Mr Suresh Prabhu, Minister of Railways, and Government of India.
The Indian Railways have finalised a policy to set up solar power plants on rooftops of railway premises, which will help to reduce dependence on fossil fuels by generating electricity from solar panels, as part of the Solar Mission of Indian Railways.
Ministry of Railways has signed a Memorandum of Cooperation (MoC) and Memorandum of Understanding (MoU) with governments and national railways of Japan and Russia for cooperation in areas such as high speed corridors, speed raising of existing routes, development of world class stations, heavy haul operations and modernisation of rail infrastructure.
The Railway Ministry plans to give a digital push to the India Railways by introducing bar-coded tickets, Global Positioning System (GPS) based information systems inside coaches, Information Technology (IT) integration of all facilities dealing with ticketing issues, Wi-Fi facilities at the stations, super-fast long-route train service for unreserved passengers among other developments, which will help to increase the passenger traffic.
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 third largest, accounting for 10 per cent of the global market.
Exchange Rate Used: INR 1 = US$ 0.0149 as on September 21, 2016
References: Press Releases, Department of Industrial Policy and Promotion, Press information Bureau, Media Reports, Railways Budget 2016-17
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Last Updated: February 28, 2017
World Bank India country director
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