Finance Minister Nirmala Sitharaman is poised to inject additional funds into a substantial transformation of the national transportation system, focusing on the Indian Railways. Anticipated to be a primary beneficiary, the Railways is expected to witness a significant surge in capital expenditure in the forthcoming interim budget, scheduled for February 1, as per a report by Business Today.
Analysts suggest that Finance Minister Nirmala Sitharaman might earmark supplementary funds to usher in a comprehensive overhaul of the national transportation infrastructure. This transformation is anticipated to encompass the introduction of modern, high-speed trains and the implementation of advanced safety measures to enhance the overall efficiency and safety of railway operations.
Projections for the Interim Budget of the fiscal year 2024-25 estimate an allocation of Rs 2.8-3 lakh crore for the Indian Railways. This allocation is intended to sustain the momentum of capital expenditure, representing an increase from the Rs 2.4 lakh crore earmarked in the previous budget estimate for 2023-24.
In the financial year 2023-24, the budgetary support for the Railways stood at approximately Rs 1.6 lakh crore, with capital allocation reaching around Rs 2.45 lakh crore. Building on this, analysts from Prabhudas Lilladher, Icra, and Elara Capital are predicting a substantial increase in capital expenditure in the upcoming budget, specifically highlighting the emphasis on modernizing the railways.
Icra, a rating agency, expects continued interest-free capital expenditure loans to states and envisions a substantial allocation towards infrastructure sectors like roads, highways, and railways in the fiscal year 2024-25. During this period, the agency has set a target for gross capital expenditure at Rs 10.2 lakh crore.
Elara Capital expresses confidence in the government’s commitment to capital spending, particularly in railways, roads, and defence, albeit at a moderate pace. They project a noteworthy 20 per cent rise in capital expenditure for the fiscal year 2024-25.
The Indian Railways, known for its significant investments in capacity improvement projects such as dedicated freight corridors, electrification, and high-speed trains, reported an improved operating ratio of 98.1 per cent in FY23, demonstrating enhanced operational efficiency compared to 107.39 per cent in FY22.
With ambitious goals, including producing 400 Energy Efficient Vande Bharat trains, the Railways envisions allocating an additional budget of Rs 40,000-60,000 crore for the fiscal year 2024-25. Currently, 41 Vande Bharat trains are operating, signalling the railway’s readiness for a transformative phase in its development and modernization initiatives. For more information, stay tuned to the IncBasil Website.
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