Industry Leaders Expectations from Rail Budget 2022

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The Rail Budget will be presented on February 1 alongside the General Budget, as has been the pattern since the Narendra Modi government took power, ahead of the Assembly elections scheduled to be held in the five states.

Nirmala Sitharaman, the finance minister, will announce her fourth budget on February 1, and reports say the Central government will increase the rail budget outlay by 15-20% this time. The Railways received Rs 1,10,055 crore from the government last year. An amount of roughly Rs 2.5 lakh crore is expected to be set aside this time.

In many railway-related areas, there is a buzz of excitement ahead of the budget. The central government may announce new passenger railway facilities. In the last fiscal year, the Railways have lost Rs 26,338 crore. Despite the losses sustained during the Covid-induced crisis, analysts feel that a train fare increase is unlikely. The Railways is also thought to be examining options other than raising fares to boost revenue.

During the Covid period, freight provided the majority of the Railways’ earnings. As a result, the railways will make an effort to prepare other freight lanes, which will relieve pressure on passenger trains. In the rail budget, about ten new light trains (aluminum-built) for long-distance travel could be unveiled.

Plans are in the works to improve rail connections in election-bound states and major cities. The government may enlist the help of commercial enterprises to do this. A bullet train connecting Delhi and Varanasi may also be announced. Indian Railways will develop the solar-power capacity to minimise their reliance on electricity and diesel and to reduce carbon emissions.

In addition, the National Rail Plan will state that by 2030, all trains will be fully electrified. Through the PPP model, redevelopment projects for the enhancement of the stations will be revealed. Twelve corridors have been identified for this purpose. It has piqued the curiosity of several companies.

The administration may also announce the formation of a Rail Development Authority this year, which will provide recommendations to the government on fare-related matters. More projects like Tejas are planned to be developed in the future to connect major tourist hotspots around the country.

In addition, the creation of specialised freight lines would be prioritised. The East-West Corridor from Bhusaval to Dankuni via Kharagpur has already been announced, as has the North-South Corridor from Itarsi to Vijayawada. The Finance Minister had also unveiled the National Rail Plan 2030 for railway development while declaring the previous railway budget.

It was announced that the railway facilities would be given a new makeover. The central government has already set aside Rs 1 lakh crore for investment. In addition, metro rail systems are being built in the outskirts of two Tier-2 and Tier-1 cities, with Indian Railways aiming to become “the world’s first 100 percent green train service” by 2030.

In addition, the federal government may declare the use of hyperloop technology in the upcoming rail budget. Passengers are transported in pods through tubes or tunnels. This mode of transport is more rapid than the bullet train.

The government could possibly make major infrastructure announcements in the budget. The government may announce the redevelopment of 500 railway stations in this budget, which will be named ‘Kayakalp.’

Alain SPOHR, Managing Director, Alstom India & South Asia
Mr. Alain SPOHR, MD, Alstom India & South Asia

Alain SPOHR, Managing Director, Alstom India & South Asia said

“Alstom believes that Railways can prove to be one of the champion sectors to provide fillip to Make in India, incentivise foreign investments and deliver a big boost to the economy. We are positive that this year’s budget will be as progressive as last year’s, where the Government allocated a record sum for capital expenditure.

Our expectations are in line with the priority accorded to infrastructure projects by the Government such as National Infrastructure Pipeline and PM Gati Shakti (National Master Plan for Multi-modal Connectivity). An enhanced capital outlay to encourage railway

modernization plans for creation of infrastructure as well as replacing railway passenger and freight fleets would be ideal. Special emphasis on multi-modal connectivity with enhanced opportunities under PPP mode is expected to boost activity in this sector.

We agree with the Finance Minister that connectivity is the essence of the economy and improving intercity connectivity is critical for the formation of smart cities and boosting the pace and volume of economy. We are expecting additional support for introduction of new technologies such as Metro Lite and Metro Neo for promoting mobility in Tier II & III cities.

We are hopeful that the government will further improve on the ease of doing business in India as there is a huge potential for growth. Introducing production linked incentives for railway manufacturers and exporters promoting Make-in-India would be encouraging while also fast-tracking the implementation of projects and supporting the manufacturing ecosystem. Certainty in policy and adequate government support for project execution can vastly improve private investment in the sector.

With the ambition to become the largest Green Railways in the world moving towards becoming a ‘net zero carbon emission’, we are hopeful that measures to promote energy efficient and carbon-friendly technologies, processes and practices will feature in the upcoming budget.

Promoting a level playing field for original domestic as well as foreign companies, which have invested substantially in India and contribute towards economic growth, will attract additional investments into the country. The Government must consider supporting companies that are significantly invested in India, conducting cutting- edge R&D and executing large railway development projects to come forward and make India an export hub. These measures will also help India become an Atmanirbhar Bharat and achieve its aspiration of a $5 trillion GDP”

Mr. Rohit Saboo, President & CEO, National Engineering Industries Ltd.

Rohit Saboo, President & CEO, National Engineering Industries Ltd Said

In the light of the continuing pandemic, the government is making an ongoing effort to achieve normalcy with regards to economic damages. Keeping in mind the future of the country, budget should be growth oriented and should focus on capital expenditure. It should continue providing financial support to SME/MSME sector, which is the future of our nation. Home grown brands should be given priority in all government tenders in line with Make in India initiative. There should be a mechanism for fast-track approval for products developed by local suppliers. The Government should focus on faster induction and implementation of Artificial Intelligence based technologies for safety and maintenance in the Railway system. Emphasis should also be given on logistics services. Further, digital integration of Railway system with industry systems can radically reduce the time and cost for domestic suppliers.”

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