Record capex allocation seen in Budget as railways eyes makeover

The budgetary allocation for the Indian Railways is expected to hit record levels as the government gears up to support a major makeover for the national transporter with the addition of modern and faster trains, and improved safety features.

Capital expenditure for the railways is likely to be increased by about 25% of the FY23-24 budget estimate, two people aware of the development said. That would take the budgetary allocation to more than 3 trillion in FY24-25 from 12.4 trillion in FY24.

The government is providing higher budgetary capital allocation to the railways since FY23 to accelerate pace of construction of key infrastructure projects including commissioning of dedicated freight corridors, and speedier trains, as well as modernizing the fleet with new-age trains, wagons and locomotives.

Higher budgetary allocation would mean that both passenger and freight rates may be unchanged next year, too, while there would be some reclassification of freight categories.

It is expected that increased capex would also go towards rolling out 300-400 Vande Bharat trains in different formats, including one with sleeper coaches, as well as overhauling of the signalling systems. Upgradation of the rolling stock and the need to fast-track modernization of the network for more efficiency in revenue generation are some other aspects that are expected to be highlighted.