Statsguru: How Indian Railways is coming out of Covid-related disruption

The Indian Railways, which is slowly coming out of the Covid-related disruption, was a key area of focus in the recently presented Union Budget. The money earned from carrying passengers is expected to surpass the pre-Covid level this year. The passenger reven­ue in 2018-19 was Rs 51,067 crore. 
 

It remained below this level for the next three years. The current year is expected to see Rs 64,000 crore in passenger revenue (chart 1).


 

Freight earnings contribute significantly more to railway finances. Receipts from freight were Rs 1.3 trillion in 2018-19. They touched Rs 1.4 trillion in 2021-22, and are budgeted to be at Rs 1.8 trillion in 2023-24 (chart 2).



The overall operating ratio, broadly the proportionate expenditure the railways incurs to earn every rupee, is expected to be 98.22 per cent this year. It was 97.3 per cent in 2018-19. It is expected to rise to 98.45 per cent next year (chart 3), amid a large-scale spending boost.


 

The amount of money that the government has allocated to the railways in the form of capital support is Rs 2.4 trillion, a multi-fold increase over levels seen even in pre-pandemic times (chart 4).



Key areas of investment include safety; spending on rolling stock, which includes locomotives, carriages and wagons; doubling of rail lines; new lines; and track renewals. These five heads account for Rs 1.6 trillion in spends (chart 5).


 

The improvement for railways comes amid an uptick in overall transport infra­str­u­cture spending, shows an analysis by glo­b­al financial major Morgan Stanley (chart 6).



The overall transport infra­struct­ure spending allocation is up from 1.8 per cent of gross domestic product (GDP) in 2022-23 to 2 per cent budgeted for the com­ing year. Hous­ing, water and smart cities have all seen allocations remain the same. There is an increase for roads to 0.9 per cent of GDP.