The Railways Parliamentary Standing Committee has suggested that Indian Railways shore up its “non-fare revenues” – coming in from segments like advertising, commercial leasing of land, and so on. Incorporating “green budgeting” methodologies into financial allocations have also been suggested.
According to the Committee recommendations, Railways can explore seeking assistance from external agencies, if necessary, “to enhance revenue by fully utilising the extensive advertising space and substantial land holdings at their disposal”. Internal Resources can be augmented by “promoting development or leasing of commercial complexes in and around railway stations to tap the high footfall of travellers.”
“Further, Railways ought to explore additional innovative methods for increasing revenue by gaining insights into advanced railway systems globally,” the report mentions.
Incidentally, the Internal Resource component of the Railways’ capital expenditure is limited . Internal resource component of capex was ₹3401 crore in FY-23 and ₹2943 crore during 2023-24. The Budget estimate for the Internal Resource component for FY-25 is ₹3000 crore.
“….there is scope to increase Internal Resource through non-fare revenue,” the Committee noted.
As per vision 2030 document, the Indian Railways aims to increase the non fare revenue from 3.4 per cent to 20 per cent of total revenue in line with advanced railways systems around the world. Indian Railways had non-fare revenue of ₹537.34 crore in FY-24.
The Committee, chaired by Dr CM Ramesh, noted that for FY-25 the annual plan has been kept at ₹2,65,200 crore, with capex increase primarily being due to increased gross Budgetary support to ₹2,52,200 crore in Budget Estimates of 2024-25. The contribution of Extra Budgetary Resources (EBR) in capex has been brought down to ₹10,000 crore.
The Railways have also pointed out that EBR increases financial liabilities, and due to this, Indian Railways have rationalised EBR (IF) and EBR (Bonds).
“However the Committee is of the opinion that the modernisation of Indian Railway infrastructure demands huge capital investment. The Committee feels that there is ample scope of improvement in Indian Railways’ infrastructure and there is need to significantly increase its planned expenditure,” it noted adding that the Ministry has “to find ways to increase private sector participation in creation of (rail) infrastructure”.
Speeding Up Freight Movement
The Standing Committee has taken note of the development of upcoming freight corridors, that include one for energy, minerals and cement, one for port connectivity and another for high traffic density. All of these corridors have been identified under the PM Gati Shakti Mission to facilitate multi – modal connectivity.
“Establishment of these corridors will have a positive multiplier effect on the Indian economy…. enhance share of IR in freight transport thereby generating increased revenue …. while simultaneously reducing carbon footprint,” it observed.
The Ministry has been asked to prioritise development of these corridors by drawing specific phases and timely execution of each.
Freight loading share of railways is at present 26 per cent, and continues to be a major revenue driver for the organisation. The average speed of freight trains in FY24 was 25.14 km/h, which according to the committee was on the lower side.
“The Committee further feels that creation of Dedicated Freight Corridors is of prime importance to increase the speed of freight trains, thereby increasing freight loading as well as earnings of Indian Railways,” the report mentioned.
Green Budgeting
Indian Railways has already committed to be net zero carbon emitter by 2030, and is working on options like electrification of rail lines, use of renewables, and so on. It has commissioned 241 MW solar power capacity and103.4 MW wind-based power plants.
Hydrogen trains are under-developed. Further Indian Railways are planning to run 35 hydrogen trains.
“The Committee further urges the Ministry to incorporate ‘Green Budgeting’ methodologies into its financial allocations,” it mentioned.
Besides additionally providing 0.5 per cent of Environment Related Works (ERW) funds has been made in all estimates of various Plan Heads. Under these heads, an amount of Rs 4174 crore has been made available in FY24, and ₹4312 crore in FY25 as ERW funds.
