I’ve said it before, and I’ll say it again. The Union Budget is a moment of reckoning, not just a fiscal ritual. As the Finance Minister’s speech unfolds and Budget papers are laid out, the nation’s financial roadmap is revealed — expenditure, revenue, deficits, tax tweaks, new schemes, and grand policy shifts — amidst desk-thumping by the treasury benches. Yet, Indian Railways (IR) no longer has a seat at this high table. Once a spectacle in itself, the Rail Budget — eagerly awaited for new trains, projects, and fare revisions — has been reduced to a mere footnote since its merger with the Union Budget. In the last Budget (July 2024), it didn’t even merit a passing mention.

Even more baffling is that whatever little is announced about railways often turns into a one-off declaration, only to be omitted for any future discussion or reference. Since 2022, pronouncements have included integrating the postal and railway networks for seamless parcel movement, bringing 2,000 km under Kavach, deploying 400 new-generation Vande Bharat trains by 2025 (2022), and undertaking 100 critical transport infrastructure projects for ports, coal, steel, fertilizer, and foodgrains, with ₹75,000 crore investment including ₹15,000 crore from private sector (2023). The interim 2024 budget proclaimed of three economic railway corridors — energy, mineral, and cement; port connectivity; and high-traffic density — as well as mooted conversion of 40,000 normal bogies to Vande Bharat standards.

Silent on progress

Yet, successive Budgets have remained silent on progress. Some of these initiatives have seen partial fulfilment, viz., other coaching earnings, of which parcel earnings are a part, are projected to rise only organically from ₹6,727 crore in 2023-24 to ₹7,500 crore in 2024-25; just 75, not 400, Vande Bharat rakes have been manufactured; and Kavach coverage remains stuck at 1,465 km, with no addition since 2022. Others have vanished from the horizon like the proposed critical transport projects are lost in the maze of inter-ministerial data and declarations, the ambitious economic corridors languish at the sanction stage with no clarity on their clash with sanction of new Dedicated Freight Corridors, and even ministry officials are unsure what upgrading normal bogies to Vande Bharat standards entails.

The last Budget set a fine precedent of treating railways with monastic silence, and the Finance Minister has dutifully upheld the tradition. Once again, Indian Railways didn’t even warrant a fleeting reference

Another key aspect of the Budget is the financials — expenditure, earnings, surplus, and investments. Predictability, it seems, was the guiding principle here as well. Balancing the books through accounting jugglery ensures the operating ratio (OR) stays just under 100, and that’s exactly what has been done. For 2024-25, the OR is projected at 98.9 by the simple expedient of tweaking pension and depreciation expenses downward from ₹67,000 crore and ₹1,000 crore to ₹66,358 crore and ₹800 crore, respectively. This deft under-allotment continues into 2025-26, with these expenses pegged at ₹68,602 crore and ₹1,500 crore, conveniently allowing the OR to be budgeted at 98.43; the actual pension burden is certainly going to be higher and depreciation is only an unnecessary evil whose allotment follows no norms on the IR.

Capex flat

Such creative number-crunching hardly bodes well for IR in the long run. Sustainability demands that it generates its own surplus to fund infrastructure upgrades. However, with surplus scarce and Extra Budgetary Resources avoided due to rising interest burdens, the government has taken to financing IR’s capex almost entirely through Gross Budgetary Support. For rail watchers, industry, and markets, the real excitement lay in the ever-climbing capex — rising steadily since 2014, fuelled by the government’s belief in railways as a national economic driver, with current finances deemed insignificant to this grand vision.

The expectations, therefore, were high for capex to breach ₹3 lakh crore, surpassing last year’s ₹2.65 lakh crore. That didn’t happen. The projections for 2024-25 and 2025-26 remain identical at ₹2.62 lakh crore — essentially stabilising after a decade of steady increases. It appears the government is stepping back, perhaps realising that massive investments haven’t yet translated into significant improvements in railway earnings and it is time to pause and relook.

One would have hoped to hear about policy initiatives and strategies to boost IR’s freight loading, which has so far grown in this year at just over 2 per cent, arrest the decline of its transport modal share (now down to a historical low of around 25 per cent), enhance passenger services — not just to generate revenue from higher-end trains but to ensure dignified and comfortable travel for the masses — lay out a feasible plan for maintaining the grand edifices under the Amrit Bharat station scheme, whose upkeep is already proving unsustainable, implement safety measures and technology upgrades to move towards zero-fatality, corporatise manufacturing units for greater efficiency, and identify optimal ways to bring in private participation.

Alas, none of this was forthcoming. Instead, Indian Railways will continue trundling along, emerging into the spotlight only when another vanity project is unveiled.

The writer is Retd GM/Indian Railways, leader of Vande Bharat project and Independent Consultant

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