Railway Budget 2024 expectations: As India aims to become the third-largest economy in the world with a projected GDP of $5 trillion in the next three years and seeks developed country status by 2047, the government is focusing heavily on infrastructure development. Among the various infrastructure domains, the railway sector stands out as a crucial component of this growth strategy.As we approach the Budget 2024-25, expectations are high regarding the government’s support and expansion plans for this vital sector.
Key Expectations from Budget 2024-25 for Railways
Given the ambitious targets and the importance of the railway sector to India’s economic growth, several key expectations have emerged for the upcoming budget. Firstly, there is a strong anticipation of a significant increase in budgetary allocation to ensure the realization of ambitious goals for expanding and modernizing the railway network. This increased funding is vital for the overall enhancement of the railway infrastructure, making it more efficient, safe, and reliable.
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Continued and enhanced funding for high-speed rail projects, particularly the Mumbai-Ahmedabad corridor, is another crucial expectation. This project, which utilizes Japan’s Shinkansen technology, is seen as a game-changer in Indian rail travel. Timely completion and the initiation of new high-speed rail corridors are necessary to revolutionize travel and connectivity in the country. The budgetary allocation for this high-speed rail project has been continuously increasing from approximately Rs 18,500 crore in FY 2023-24 to Rs 25,000 crore in the interim budget in February 2024 and is expected to rise further, indicating a strong commitment to advancing India’s railway infrastructure and marking a significant step in enhancing connectivity
Investment in safety upgrades remains a top priority. Dedicated funds for safety measures, including track renewal, advanced signalling systems, bridge strengthening, and the implementation of the Kavach safety system, are essential to enhance passenger and cargo security. These measures aim to reduce accidents and ensure the safety of the railway network. Following recent mishaps, the budget is anticipated to allocate funds for these critical safety upgrades to reduce accidents and enhance passenger and cargo security.
Environmental sustainability is also a critical focus. Substantial investments in the electrification of rail lines and other green initiatives are expected to promote sustainability and reduce the carbon footprint of the railways. The Budget 2024-25 is likely to reflect a strong commitment to green initiatives to cut carbon emissions and reduce reliance on non-renewable energy sources.
The digital transformation of Indian Railways is another significant expectation. The budget is anticipated to allocate resources towards technologies like IoT, AI, automation, and blockchain. These technological advancements will modernize the railway sector, making it more competitive and capable of meeting future demands. This will also lead to a reduction in costs and improve passenger and logistics services.
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Dedicated Freight Corridors (DFCs) are another area of focus. Continued support for the completion of existing DFCs and the initiation of new ones is crucial for enhancing freight efficiency and reducing congestion on passenger lines. This will play a vital role in improving the logistics infrastructure of the country.
Lastly, significant investment in the modernization of railway stations and the introduction of modern, high-capacity coaches are expected to improve passenger comfort and services. Upgraded stations and advanced coaches will provide a better travel experience, aligning with global standards. The railway minister has outlined ambitious targets, including adding 3,000 new trains over the next five years, laying approximately 5,000 km of tracks every year, and upgrading more than 1,300 railway stations to significantly enhance capacity and modernize the railways.
Previous Measures and Government Commitment
The substantial increase in budget allocation for railway infrastructure from approximately Rs 1.10 lakh crore in FY 2021-22 to around Rs 2.52 lakh crore in the FY 2024-25 interim budget demonstrates the government’s strong commitment to this sector. It is expected that the upcoming budget allocation will further drive infrastructure development and potentially spur economic growth. Recently, railway stocks have also shown a positive response, reflecting investor optimism regarding anticipated favorable budgetary allocations that are expected to support the sector’s growth.
With a focus on expansion, modernization, sustainability, and technological integration, the government has the opportunity to transform Indian Railways into a world-class network, driving India’s economic growth and enhancing its global standing. By addressing these key areas in the Budget 2024-25, the government can ensure that the railway sector continues to be a backbone of India’s transport infrastructure, significantly contributing to the country’s economic development and global competitiveness.
(Satish Aggarwal is Tax Partner, EY India. Ramandeep Singh Modi, Director, EY India, also contributed to the article)
