Facts:
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Railway moves 23 million people a day.
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In China, the investment in railways is about Rs. 9 to 10 lakh crore whereas in India it is Rs. 40,000 crore a year. As a result, rail traffic is going to the other sectors.
Developments in the railway sector in recent years:
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Proposals for bullet trains.
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Introduction of ‘Vande Bharat’ express trains.
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Introduction of Vistadome coaches along selected routes.
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Remodelling of railways stations along the ‘airport standard’.
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Historically lower number of accidents.
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Historic levels of capital investments in the railway sector. The capex outlay for 2021-22 is Rs 2,15,000 crore which is more than five times the 2014 level. The next 10 years will see a very high level of capital expenditure in the railway sector.
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Record levels of freight loading.
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National Rail Plan : lays down the road map for capacity expansion of the railway network by 2030 to cater to growth up to 2050. It envisages the creation of a future-ready railway system that is able to not only meet the passenger demand but also increase the modal share of railways in freight to 40-45 per cent from the present level of 26-27 per cent.
Concerns in Railway sector:
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Precarious financial health:
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Budget shows surplus but actual financial status of the railways continues to remain in deficit.
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The planned projects like line doubling of existing routes, the introduction of new lines and 100% electrification require huge investments and have long gestation periods.
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Given the limited fiscal capacity of the government, these projects will need to be financed by heavy institutional/market borrowings at relatively high rates. Hence the repayment of loans and interest will continue to remain a pressure on the railways at least in the near future until the new infrastructure additions start generating revenues for the railways. Notably, some experts have also raised doubts over the financial viability of some of the planned infrastructural projects.
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Confusion regarding management architecture:
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In 2019, the government decided to do away with the system of recruiting officers to the ‘Group A’ services in the Railways through the Combined Engineering Services Examination (for technical posts) and the Civil Services Examination (for non-technical positions). Instead, it proposed having recruitments to a single service called the Indian Railways Management Service (IRMS). This decision was based on the argument that the old system had led to departmentalism in railways which was hampering optimum decision making and the smooth working of the Railways.
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It will lead to the generation of generalists as against the desire to have domain experts as envisaged by the changes made to the management architecture.
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Related Questions:
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“Indian Railways plays a pivotal role in reviving economic growth in the country and investment in the railways has a large multiplier effect on the rest of the economy.” Examine how the 2015 railways budget seeks to achieve this goal. (200 Words)