Recently, the Railways (Amendment) Bill, 2024, has been passed in the Lok Sabha and Parliamentary Standing Committee on Railways released report on Railway Modernization and Financial Sustainability.
About Railways (Amendment) Bill, 2024
Simplified Legal Framework
Repeals the Indian Railway Board Act, 1905 and incorporates its provisions into the Railways Act, 1989.
Indian Railway Board Act, 1905 constituted the Railway Board as the central authority to administer the Indian Railways.
Aims to avoid referencing two separate laws for railway administration.
Additional Power to Central Government on Constitution of Railway Board: Central government will prescribe:
the number of members of the Board,
the qualifications, experience, terms and conditions of service, and
manner of appointment for the Chairman and members of the Board.
The Railways (Amendment) Bill simplifies legal structures but retains the centralized framework, leaving many operational and financial challenges unaddressed. The recent Parliamentary Standing committee has also highlighted the need for Structural reforms crucial for improving efficiency, competitiveness, and service quality.
Key Highlights of the Report of Parliamentary Standing Committee
Parameters
Observations
Recommendations
Financial
Most of the earnings of Indian Railways comes from its freight services.
In 2023-24, Indian Railways earned revenue of Rs 1,68,293 from freight and around Rs 70,000 was from passenger services
Low revenues from passenger segment results in very low net revenue
Make a comprehensive review of passenger fares in different trains and classes.
Review AC class fares by aligning it with costs incurred while keeping general class affordable.
Boost non-fare revenue to 20% by 2030 through advertising and commercial development.
Operational
Average freight train speed has remained stagnant at 25 km/hr over past 11 years.
Creation and Expedition of new Dedicated Freight Corridors to increase speed, freight loading and earnings
Infrastructure and modernisation
Investment
Increased capital expenditure (capex) mainly due to increase in Gross Budgetary Support.
Dependency on has reduced its dependence on Extra Budgetary Resources (EBR) for capex is reduced as market borrowing increases financial liabilities due to debt servicing.
Land acquisition: one of the primary factors contributing to delays in numerous projects is issues associated with land acquisition.
Road over Bridges (RoBs) & Road under Bridges (RuBs): Targets for RoB/RuB completion have not been met in the last three years.
Indian Railways has removed all unmanned level crossings and is replacing manned ones with RoBs and RuBs.
Investment: Boost private sector involvement in railway infrastructure and station redevelopment
Land acquisition: Consider policy changes to speed up land acquisition and ensure timely progress through consistent engagement with state governments at higher levels.
RoBs and RuBs: The Committee commends the new policy allowing Railways to fully fund stalled projects due to state inaction on cost-sharing, ensuring timely completion of pending works.
Research
Low allocation and utilization of Railway Research Funds (E.g. budget estimates for railway research is merely 72 crore for 2024-25)
Increase scope of Research & Development to ensure modernisation and assimilation of latest technologies
Safety
Slow expansion of KAVACH system with only 1,465 route km in South Central Railway and 80 route km in North Central Railway.
Ensure faster penetration of Kavach across Indian Railway Network.
Green Railways
Indian Railways have set a target of making themselves Net Zero Carbon Emitter by 2030
Electrification of railway lines, sourcing of energy requirements through renewable sources, water conservation, waste management etc. are key measure being take taken in this spirit.
Green budgeting refers to the use of budgetary policy-making tools to better understand environmental impact of spending choices, and ensure public budgets are aligned with climate and environmental objectives.
Conclusion
Although Indian railways has made considerable progress, it must embrace a strategic approach to modernize infrastructure by adopting advanced technologies, enhancing sustainability, and boosting operational efficiency to meet present and future requirements and meet global standards.
Amrit Bharat Station Scheme (2022) for development of railway stations and National Rail Plan (2020) to improve efficiency of freight transportation are steps in positive direction.
