Union Finance Minister Nirmala Sitharaman is likely to make announcements related to Railways in the Union Budget 2020 on February 1. Beyond infrastructural boost, the Centre may this time focus on public-private-partnership programmes. There are expectations that apart from announcing new routes, the government may announce privatisation of various railway stations.
“The sector could also be opened to foreign investors. Additionally, investors can be allowed to run commercial and real estate business and railways could monetise its assets. While the scale may not be large, it would provide a firm roadmap for the future,” suggests Care Ratings.
After the success of India’s first private train Tejas, the Centre may also consider privatising other trains and railway operations. The Centre’s railway station modernisation plan will also boost steel consumption in the country.
Experts believe the Centre could come up with measures to help Railways achieve its 2024 target of a complete transition to electricity. During India-Brazil business forum this week, Goyal said by the year 2024, the entire Indian Railways could be run on 100 per cent electricity. “It will be the first railway network in the world to be run on 100 per cent electricity. By 2030, we plan to make the entire railway network a net-zero emission network,” he opined.
Chances of a hike in passenger fare seem low as the government had raised fares recently. The Centre may not consider increasing freight rates either. The Railways increased basic passenger fare by up to 4 paise for various classes of Indian Railways from January 1.
The Centre is struggling to keep Railways profitable. Government data shows Railways posted the worst-ever operating ratio of 98.4 per cent during FY18. An operating ratio of 98.4% means the Railways spent 98.4 paise to earn Re 1 in the last financial year.
Railways Minister Piyush Goyal had last year said that he was hopeful that Railways’ operating ratio would improve to 95% in 2019-20. But Railways’ expenditure on salaries has been gradually increasing with a significant jump every few years due to Pay Commission revisions.
