Union Budget 2024: Will Railway Budget see more budgetary allocation for upgrade, safety?

Railway Budget: The upcoming Union Budget for the Railways in the fiscal year 2024-25 is anticipated to place a heightened emphasis on bolstering passenger capacity and enhancing safety measures within the railway infrastructure, as per news reports. In the Interim Budget this year, Finance Minister Nirmala Sitharaman earmarked a substantial allocation of Rs 2,52,200 crore to the railways as gross budgetary support, supplemented by an additional Rs 10,000 crore sourced from extra-budgetary resources.

Recently, Union Minister for Railways Ashwini Vaishnaw disclosed plans for the production of 10,000 non-air-conditioned coaches by the national transporter across the upcoming two financial years.

Here are the key expectations:

1. The government may allocate a significant amount of funds to expand facilities for the general public in an attempt to increase the rail capacity through the expansion of the network. The goal is to reduce congestion, prevent operational mishaps, and ultimately enhance the overall transportation experience for the public.

2. In the Interim budget, it was announced that railway corridors amounting to Rs 11 lakh crore would be included in the government's upcoming projects. The railway ministry has stated that this budget will cover a total of approximately 400 projects that are currently in the preparation phase.

3. Manish R Sharma, Partner & Leader Infrastructure, Transport & Logistics PwC India, said that the government might continue to focus on modernisation of he facilities for at least another five years as the network is vast.

4. More trains and trips can be added to reduce the waitlisting. The Indian Railways runs 10,754 daily train trips and serves about 700 crore passengers annually. By the year 2030, it aims to increase their services to accommodate up to 1,000 crore passengers while resolving the issue of waiting lists entirely. Minister Vaishnaw had said that there is a need to increase in the number of train trips by at least 30%, which is about 3,000 additional trips, to address the challenge of waitlisting in the passenger category. 

5. The Budget is anticipated to allocate financial resources for the enhancement of the metro network, development of NaMo Bharat corridors, expansion of Vande Bharat trains, establishment of high-speed corridors, and the creation of economic corridors, with the aim of sustaining the current positive progress.

6. A PLI scheme for rail components in the upcoming budget. Under the PLI programme, the government offers output-linked incentives for products that are usually imported. 

Analyst Ajay Bagga said key expectations for the railways sector in the Union Budget 2024 would be maintaining high capex outlay, allocating funds for safety through the rapid rollout of the Kavach anti-collision system, launching new Vande Bharat and Amrit Bharat trains, increasing freight wagons and passenger compartments, and significantly funding safer and faster tracks in congested networks.

7. CareEdge Ratings expects an increased budgetary allocation of 12-15 percent in the Union Budget. Reforms like the introduction of a hybrid annuity model for improving public-private participation in the railways segment besides asset monetisation efforts are some of the other expectations.

8. As per CareEdge, conversion of rail bogies into Vande Bharat standards is also likely to augment Vande Bharat Train Capacity by 50-60 x in the medium term. Focus on economic rail corridors to achieve first-mile-last-mile connectivity and station redevelopment shall be a continual theme this Budget.