Indian Economy News

Capex of Indian Railways for 2020-21 has been pegged at an all-time high of Rs 1,61,042 crore; the emphasis is on continued capacity enhancement through accelerated investments and execution

  • IBEF
  • February 5, 2020

The aim of the Government is to make Indian Railways the growth engine of the economy. The emphasis is on continued capacity enhancement through accelerated investments and execution. Five measures relating to Railways have been highlighted in Budget speech.

I. Setting up a large solar power capacity alongside the rail tracks, on the land owned by the railways. A proposal is under consideration.
II. Four station re-development projects and operation of 150 passenger trains would be done through PPP mode. The process of inviting private participation is underway.
III. More Tejas type trains will connect iconic tourist destinations.
IV. High speed train between Mumbai to Ahmedabad would be actively pursued.
V. 148 km long Bengaluru Suburban transport project at a cost of Rs 18,600 crore (US$ 2.66 billion), would have fares on metro model. Central Government would provide 20 per cent of equity and facilitate external assistance up to 60 per cent of the project cost.

To this end, Government has increased investment and introduced modern technology while focusing on safety, speed and service to passengers.

Capex of Indian Railways for 2020-21 has been pegged at an all-time high of Rs 1,61,042 crore (US$ 23.04 billion). Capex for the year 2019-20 is Rs 1,56,352 crore (US$ 22.37 billion) (RE), which is 17.2 per cent higher than the previous year. The target of new lines, gauge conversion and doubling/tripling etc. for 2020-21 is 3750 Route Kms against 3150 Route Kms in 2019-20. Electrification of the entire Broad-Gauge network is to be completed by 2023-24. In 2020-21, Electrification of 6000 Route Kms has been targeted. In the Budget Estimate (BE) 2020-21, the freight loading of Indian Railways is kept at 1265 MT which is 42 MT (i.e. 3.4 per cent) incremental over Revised Estimate (RE) 2019-20. Average freight lead has been kept at 553 km, and originating passengers kept at 8792 million.

Railways now plan to induct latest technology for Signalling & Telecommunication system. Under modernization plan of Railway signalling system, it has been decided to implement Centralized Traffic Control (CTC) system on Indian Railways. This will increase operational efficiency. In first phase CTC will be implemented on 1830 KMs over 8 Zonal Railways on sections provided with Automatic Block Signalling system. Further, in the second phase, CTC will be implemented over balance 8 zonal Railways along with Automatic Block Signalling system. Government has initiated the upgradation of the decades old signalling system into an Automatic Train Protection System, which will be a mix of proven international technology as well as indigenously developed systems with an impetus to Make in India.

Facilitating private participation in Railways to build a seamless national cold supply chain for perishables, inclusive of milk, meat and fish, the Indian Railways will set up a "Kisan Rail" - through PPP arrangements. There shall be refrigerated coaches in Express and Freight trains as well.

Capital Expenditure, Revenue Receipts, Revenue Expenditure & Operating Ratio of Indian Railways is as follows: -

Capital Expenditure of Indian Railways:

  • Capital Expenditure Rs 1,61,042 crore (US$ 23.04 billion) which is higher than Revised Estimate (RE) 2019-20 by Rs 4,690.03 crore (US$ 671.06 million). This is 2.99 per cent higher than RE 2019-20.
  • Gross Budgetary Support (GBS) (excluding Nirbhaya Fund) at Rs 70,000 crore (US$ 10.02billion) includes Rs 5,000 crore (US$ 715.41 million) towards Rashtriya Rail Sanraksha Kosh (RRSK) and Rs 18,500 crore (US$ 2.65 billion) as IR’s share from Central Road and Infrastructure Fund (CRIF). GBS in 2020-21 is 3.19 per cent more than RE 2019-20.
  • Nirbhaya Fund at Rs 250 crore (US$ 35.77 million).
  • Internal Resources at Rs 7,500 crore (US$ 1.07 billion) (Depreciation Reserve Fund (DRF) -Rs 1,000 crore (US$ 143.08 million), Development Fund (DF) -Rs 1,500 crore (US$ 214.62 million) and RRSK-Rs 5,000 crore (US$ 715.41 million)).
  • Extra Budgetary Resources (EBR)-IRFC at Rs 30,000 crore (US$ 4.29 billion).
  • Extra Budgetary Resources-Institutional Finance (EBR-IF) at Rs 28,000 crore (US$ 4.01 billion).
  • Extra Budgetary Resources (EBR)-PPP at Rs 25,292 crore (US$ 3.62 billion).

Revenue Receipts of Indian Railways:

  • Passenger earnings at Rs 61,000 crore (US$ 8.73 billion).
  • Goods earnings kept at Rs 1,47,000 crore (US$ 21.03 billion).
  • Other Coaching earnings and Sundry other earnings kept at Rs 6,500 crore (US$ 930.03 million) and Rs 11,013 crore (US$ 1.58 billion) respectively.
  • Gross Traffic Receipts are thus kept at Rs 2,25,613 crore (US$ 32.28 billion). This is 9.6 per cent above RE 2019-20.
  • Total receipts of Indian Railways are thus kept at Rs 2,25,913 crore (US$ 32.32 billion).

Revenue Expenditure of Indian Railways:

  • Ordinary Working Expenses (OWE) kept at Rs 1,62,753 crore (US$ 23.29 billion).
  • Appropriation to DRF kept at Rs 800 crore (US$ 114.47 million).
  • Appropriation to Pension Fund from Revenue kept at Rs 53,160 crore (US$ 7.61 billion).
  • Miscellaneous expenditure kept at Rs 2,700 crore (US$ 386.32 million).
  • Thus, the total revenue expenditure of Indian Railways has been kept at Rs 2,19,413 crore (US$ 31.39 billion).

 Operating Ratio of Indian Railways:

Operating Ratio comes to 96.28 per cent against 97.46 per cent in RE 2019-20. The 'Net' of revenue over expenditure thus comes to Rs 6,500 crore (US$  930.03 million) which has been appropriated to DF (Rs 1,500 crore [US$ 214.62 million]), and RRSK (Rs 5,000 crore [US$ 214.62 million]) for supplementing Indian Railways' capital expenditure.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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