Budget 2022: Indian Railways capex at all-time high of Rs 2.45 trillion

The capex for 2022-23 includes Rs 1.37 trillion from general revenues, Rs 1.08 trillion from Internal and Extra Budgetary Resources and Rs 200 crore from Nirbhaya fund

With the government giving an extra thrust on PM GatiShakti, the Indian Railways is set to see its highest-ever capital expenditure (capex) of Rs 2.45 trillion for 2022-23, up 14 per cent from the Revised Estimate (RE) of Rs 2.15 trillion for the current financial year in the Union Budget for 2022-23 presented by Union Finance Minister Nirmala Sitharaman on Tuesday.

This will result in the operating ratio, a key metric to assess the Railways’ financial health, coming under pressure.

“We are targeting 96.98 per cent operating ratio (OR) in the coming year. We believe we will improve this. We are today already achieving over 4 million tonnes of loading every day. We are now targeting a consistent 4.5 million tonnes per day and then 5 million tonnes per day,” Railway Minister Ashwini Vaishnaw told Business Standard.

Roughly put, this means the Railways aims to spend Rs 96.98 for every Rs 100 it earns in FY23. “Even though we have targeted it, we should be able to achieve better than that,” he added.

The OR of the Indian Railways has worsened to 98.93 per cent in the RE for FY22. This is lower than the 96.15 per cent OR it had budgeted. Net revenue of the Railways crashed to Rs 875 crore in the RE of FY22, down from the budgeted Rs 6,561 crore.

For FY23, the Railways has budgeted a net revenue of Rs 5,360 crore.

“We generally achieve (freight) loading of around 1,200 MT a year. This year we are reaching close to 1,400 MT loading, this is a record. Since the physical performance has improved, there is no need to reimburse due to Covid-19 or because of any other reasons,” Vaishnaw said.

The capex for FY23 includes Rs 1.37 trillion from general revenues, Rs 1.08 trillion from internal and extra budgetary resources (IEBR) and Rs 200 crore from the Nirbhaya fund.

The Railways’ total receipts, comprising revenues from passenger, goods, other coaching, sundry and other heads were kept at Rs 2.4 trillion in the BE for FY23 as against a revised estimate of Rs 2.02 trillion for the current fiscal.

“Railways will develop new products and efficient logistics services for small farmers and SMEs, besides taking the lead in integration of postal and Railways networks to provide seamless solutions for movement of parcels,” Sitharaman had said in her Budget speech

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As a part of Atmanirbhar Bharat, around 2,000 kilo meter of rail network will be brought under Kavach, the indigenous world-class technology for safety and capacity augmentationin FY23.