Mains Practice Questions

Approach

• Introduce the significance of railways for Indian GDP.
• Discuss the issues faced by the Indian railways in general and economic issues in particular.
• Discuss how monetisation of railway assets plays a significant role in resolving such issues.
• Suitably conclude.

Introduction

The Indian Railways is the fourth-largest in the world in terms of size with a 1,21,407 km long network and a total track of over 67,368 km. It employs more than 1.3 million people.

Body

Challenges Faced by Indian Railways

• Funding Related Issue: Since independence, the railways has been primarily dependent on government support thus making it challenging to generate adequate funds for capital expenditure..
• Mishappenings due to Poor Infrastructure: Infrastructure and funding challenges in railways manifested in the form of collisions, derailments and level crossing accidents.
• Revenue Loss: In the previous fiscal (FY 2020-21), Covid-induced disruption resulted in a revenue loss of ?38,017 crore in the passenger segment.
• Huge Redevelopment Costs: As per estimates, the redevelopment of 125 stations along with the development of real estate would cost approximately ?50,000 crore.
• Under-Capacity of Passenger Trains: The under-capacity of passenger trains is evidenced by the fact that 15% ticket holders on an average are waitlisted.

Monetisation Plays a significant role in resolving such issues

Asset Monetisation is the creation of new sources of revenue by unlocking the value of hitherto unutilized or underutilized public assets.

• Monetisation of Railways, a Way Ahead: Monetisation of railways could be a game changer as it could put underutilized railway assets to better use and provide the funds needed to fast-track the development of railway infrastructure in India.
• Efficient Implementation of Policy Initiatives: An efficient implementation of National Monetisation Pipeline (NMP) will ensure a huge influx of funds that could vastly upgrade the infrastructure and operational logistics for passenger trains, revamp railway stations, freight terminals, railway colonies, and railway tracks.
• Utilizing Railway Assets: It is important to realize that the bulk of our railway assets have been lying either unutilized or underutilized since independence.
  
  • The land along the railway tracks could be leased out to telecom companies for laying cables.
  • Also it would be prudent to enable the utilization of freight terminals as logistics parks for private companies and generate another revenue stream.
• Robust Investments Necessary : Robust investments by the private sector will facilitate the achievement of ambitious targets set by the government such as achieving 100% electrification by 2023, Net Zero Carbon Emission Network by 2030, ease of ticket booking, online freight services etc.
• Mitigating Under-Capacity: To mitigate the problem of under-capacity of passenger trains, 12 clusters have been earmarked in high-demand routes which is expected to bring in ?30,000 crores worth of private investments, with the potential of adding 150 modern trains along 109 routes. Such initiatives need to be encouraged.

Conclusion

Indian railways is a lifeline for more than 30 million citizens who use it every day. Modernizing the railway facilities and enhancing the speed of trains will go a long way towards making India's workforce more productive. The monetisation of railways supported by a sound economic rationale will likely serve as a playbook for other sectors to emulate.