Higher CAPEX, greater private participation expected in Budget 2020 for Railways

New Delhi, Jan 27: The Indian Railways may see an increase in capital expenditure in the Budget for fiscal 2020-21 Finance Minister Nirmala Sitharaman will present as a part of the Union Budget on February 1, given the Narendra Modi government's thrust for infrastructure building and connectivity to make India a $5 trillion economy by 2024-25.
In last year's Budget, the Railways received a budgetary allocation of Rs 65,837 crore and the highest ever outlay for capital expenditure of Rs 1.60 lakh crore.
With added emphasis on areas such as modernisation of signalling system, rolling stock and telegraph technology, and doubling and tripling of tracks, the allocations could get a hike this time.
Railway Minister Piyush Goyal discussed the plan of railway electrification and the huge investment opportunity it presents at the just concluded World Economic Forum in Davos, Switzerland, with ABB Chairman and CEO Peter Voser.
The Budget for fiscal 2019-20 had pegged the investment requirement of the Indian Railways at Rs 50 lakh crore over a period of 12 years.
In December last year, Ms Sitharaman unveiled a 102 lakh crore national infrastructure pipeline in which railway projects will account for 13.68 lakh crore.
Last week, the Prime Minister intervened to fast-track a railway line in Odisha that has been delayed for 25 long years.
Mr Goyal has stressed the need for a public-private partnership funding model for the sector. "This big investment is impossible through the railway and government budgets. So, the way out is to work on a public-private partnership (PPP) model," he said this month.
The national transport network may also see increased participation of private players in the modernisation of stations and better facilities for passengers.
The government has announced that private operators would soon run150 new trains on a revenue-sharing model.

"Given the annual capital expenditure outlays of the Railways is 1.5 trillion to 1.6 trillion, completing even all sanctioned projects would take decades. It is, therefore, proposed to use public-private partnership to unleash faster development and completion of tracks, rolling stock manufacturing and delivery of passenger freight services," Ms Sitharaman had said in her 2019-20 budget speech.
In 2019, the railways offered WiFi at 5,400 stations, introduced Real-time Train Information System in collaboration with Indian Space Research Organisation for automatic chart preparation and passenger train information.
Announcement of new services in the Tejas and the Vande Bharat Express category is also expected.
The railways may cut freight rates to draw more traffic from road. Railway Board chairman Vinod Yadav has spoken about rationalising fares and freight rates. "While freight fares are already high, our target is to draw more traffic from road to railways in this regard.'
From the start of the new year, passenger fares have been hiked by 1 to 4 paisa across various classes. The flexi fare scheme has also been extended by a year till March 2021 to raise earnings.

The Railway Budget earlier was presented separately. But in 2017, this decades-old practice was given up and the then finance minister Arun Jaitley presented it on the same day as part of Union Budget.