Why India Has a Separate Rail Budget

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New Delhi:  Prime Minister Narendra Modi's new government on Tuesday presented its first Rail Budget, promising to seek increased foreign and domestic private investment to fund modernisation of the country's huge but badly stretched network.

The state-owned railway has suffered from years of low investment and populist policies to subsidise fares. These have reduced the system to a slow, congested network that crimps economic growth.
Here are some facts about India's railway budget and the network:
  1. The tradition of presenting a separate railway budget started in 1924 during the British era, when the network was the country's largest industrial asset. Currently, the government unveils the railway budget days ahead of its annual federal budget.
  2. With 1.3 million employees, the Indian Railways is among the world's largest employers. It has added about 260,000 staff in the past five years.
  3. Critics have long argued that India should abolish a separate budget for railways, given that it now accounts for a small share of the overall budget of Asia's third-largest economy.
  4. Lack of timely reforms and investment have hurt growth. Experts say railways need 20 trillion rupees ($334 billion) of investment by 2020. To date, there has been little private sector participation.
  5. For the five years ended April 2012, when there was a $16 billion investment target, public-private partnerships accounted for only 4 percent of the total.
  6. Growth in the route network has been slow. There were 53,996 kilometers (33,540 miles) of routes in 1947 when India became independent, and rail tracks now cover 65,000 km. That's an addition of around 11,000 km in 67 years, or 164 km annually.
  7. India has the world's fourth-longest route network after the United States, Russia and China. In 1980, however, India had more route coverage than China, before rapid modernization in China changed the picture.
  8. India added 1,750 km in railway tracks between 2006 and 2011, according to report from consulting firm EY. In comparison, China added 14,000 kms during the same period, the firm said.
  9. Passenger fares are highly subsidized for the 23 million Indians that travel daily by rail.
  10. Railways handled most of the country's cargo in 1950 but now account for only about one-third because of the congested network and slow train speeds.





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