Major Outlay for Indian Railways

What is in the News ?

• The Union Budget 2023 has doubled the PM Gati Shakti National Master Plan to States from ₹5,000 crore to ₹10,000 crore, and has announced an outlay of ₹2.4 lakh crore for the Indian Railways. 
• The plan is a “transformative approach for economic growth and sustainable development dependent on the engines of roads, railways, airports, ports, mass transport, waterways and logistics infrastructure”.
• With a target of increasing the share of the railways in freight movement from 27% to 45% and increasing freight movement from 1.2 billion tonnes to 3.3 billion tonnes, by 2030, PM Gati Shakti provides the right platform to address the infrastructural challenges that have hampered the movement of freight by rail.

Why Focus on Railways ?

• The Railways offer an efficient and economic mode of logistics movement given their pan-India network.
• The Railways can play an important role in enabling a coordinated and integrated logistics system.
• Great Scope for Non-Bulk Commodities : In 2020-21, coal constituted 44% of the total freight movement of 1.2 billion tonnes, followed by iron ore (13%), cement, food grains, fertilisers, etc. Transportation of non-bulk commodities accounts for a very small share of the rail freight movement.
• Global Best Practices : Globally, railway systems are heavily investing in advanced rail infrastructure for quick and low-cost container movement. For example, China uses special trains to carry containers that connect significant ports to the inland.

 Problems Faced by Indian Railways

• The national transporter faces several infrastructural, operational and connectivity challenges, in turn leading to a shift of freight traffic to roads (65%).
• The effect is an increased burden on roads, congestion, pollution, and resultant logistics cost escalations (nearly twice the rail cost).
• An increase in containerised traffic (for non-bulk commodities) over the last decade.
• The absence of integrated first and last-mile connectivity by rail increases the chances of damage due to multiple handling and also increases the inventory holding cost.

Way Forward

• Continuous monitoring of existing projects (like PM Gati Shakti) along with identification of new priority areas.
• Improve infrastructure that is backed by adequate policy tools and also encourage private participation. For example, the upcoming Dedicated Freight Corridors and multimodal logistics parks will ease the oversaturated line capacity and improve the train timings.
• Establishing a special entity under the railways to handle intermodal logistics will help in addressing the first and last-mile issues faced by the railways.

Prelims Question for Practice

Which of the following can be considered as an advantage of capital expenditure in railways?
1. Boost to aggregate demand
2. Efficient supply-chains
3. Disruptions in logistics efficiency

Select the correct option using the codes below:
a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1,2 and 3

Ans. a)

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