Union Budget 2024: Railways capex up marginally to Rs 2.65 trillion

Around Rs 1.08 trillion lined up for critical safety works like Kavach, repairing and overhaul of old lines

On February 25, 2016, when the then railway minister Suresh Prabhakar Prabhu stood up to present his Budget — the last railway Budget — he termed it a reflection of common citizens' aspirations. In 2017-18, breaking a 92-year-old legacy, India merged the railways Budget with the main Budget. By 2024-25, from having a separate Budget, Indian Railways has hardly found a mention in the Budget speech. 

The national transporter, however, saw a marginal rise of 2 per cent in its outlay provided for capital expenditure (capex) in the Union Budget of 2024-25 at a record Rs 2.652 trillion, from Rs 2.6 trillion in the Revised Estimate (RE) for 2023-24. The majority of the capex comes from a record share of government budget support or general revenues, pegged at Rs 2.52 trillion, up by 5 per cent from Rs 2.4 trillion in the revised estimate of the last Budget.

 

The other contributors to the capex are Rs 10,000 crore from extra budgetary resources, Rs 3,000 crore from internal resources and Rs 200 crore from Nirbhaya Fund. A major parameter of railways' financial health, its operating ratio was targeted at 98.22 per cent for the current financial year against a revised estimate of 98.65 per cent in 2023-24. This means that the national transporter will spend Rs 98.22 for every Rs 100 that it will earn.

“The allocation is Rs 2.62 trillion for capital investment (excluding internal resources), which is a record number. In 2014, it used to be Rs 35,000 crore," said Union railway minister Ashwini Vaishnaw while addressing the media on Tuesday. He added that a big part of this was safety related and Rs 1.08 trillion would go for critical safety works like Kavach, repairing and overhauling of old lines.

"Kavach will be a major part of the safety allocations this year. Kavach 4.0 has been approved two days ago, and will help the needs of the diverse railway network,” he said.

The net revenue expenditure of railways is placed at Rs 2.79 trillion in BE 2024-25 compared to Rs 2.59 trillion in RE 2023-24, up by 8 per cent. The only mention that the national transporter got in the Budget speech was when the finance minister Nirmala Sitharaman lined up development funds for Andhra Pradesh. Total receipt of railways, comprising revenues from passenger, goods, other coaching, sundry other heads and Railway Recruitment Boards was placed at Rs 2,79 trillion in BE 2024-25 against Rs 2,59 trillion in RE 2023-24.

Taking into account the rising general coach passengers, railways will manufacture 10,000 extra non-air-conditioned coaches.

“Railway is a low-income transporter. The ratio of general coaches to AC coaches has always been the same. The demand for general travel has been increasing to 7 billion. We decided to manufacture 10,000 extra non-AC coaches, which has now been accounted for by the Budget,” Vaishnaw said.

“Concerning Railways, the focus of the Budget has been on execution then an increased outlay as was expected. The creation of the node along the Amritsar-Kolkata Industrial Corridor (AKIC) will help the Eastern dedicated freight corridor garner additional cargo, in the medium term. While expenses for staff see an upward trajectory, investments for electrification are bearing fruit with a reduction in fuel expenses,” said Jagannarayan Padmanabhan, senior director and global head , Consulting - Transport logistics Mobility, CRISIL.