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Four years of Modi government — Railways: Reforms on track, revenue a worry

Sadananda Gowda was replaced within six months by Suresh Prabhu to turn around the Railways, but the next three years saw little perceptible change in the service.

Railways to place ladies coaches in centre, paint in different colour The NDA government spent the past four years on long-term infrastructure building in railways. (File)

Considering its size, scale of operations and importance in the country’s transport infrastructure, the Railway Ministry got a political lightweight at the helm when the Narendra Modi government came to power in 2014. Sadananda Gowda was replaced within six months by Suresh Prabhu to turn around the Railways, but the next three years saw little perceptible change in the service. Prabhu, it seemed, focused on getting Railways out of the cycle of under-investment and creating future network capacity through long-gestation works. That left Piyush Goyal, who took over in September 2017, to show some transformation in the rail sector before the Modi government’s term ends next year. Maybe that is why, by all accounts, the minister has showed extraordinary urgency at every progress review meeting.

What’s Done

The NDA government spent the past four years on long-term infrastructure building in railways. Laying of second, third, and fourth lines on busy routes to enhance network capacity, and bringing in Northeast connectivity through broad-gauge conversion have been priorities. Electrifying routes also got a major thrust. For all this, the Railways for the first time opened itself up to borrowing funds from outside.

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So, if during UPA-II, the Railways could spend Rs 2.3 lakh crore on capital works, the present government has so far spent Rs 3.82 lakh crore on infrastructure creation. If 7,600 km of broad gauge lines were opened for use in UPA-II, around 9,500 km has been commissioned between 2014 and March 2018. Replacement and maintenance of old tracks — even if at the cost of efficient mobility — has taken a front seat.

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After a string of accidents and heavy casualties since 2014, the year 2017-18 saw the number of accidents falling to 73 — the least ever. The Finance Ministry, too, loosened its purse strings. The Gross Budgetary Support for the current year is Rs 55,000 crore. This is also because the NDA government has done away with a separate Railway Budget.

Customer service has undergone a major change. The Railways has built a robust customer-interface ecosystem across social media platforms. Real-time complaint redressal is now just a message away. Instances of people getting diapers or medical help delivered on moving trains with just a tweet are part of this success story. Since Goyal and Ashwani Lohani, Chairman of Railway Board, took over eight months ago, several priority projects have shaken off bureaucratic sloth. One of them is the Railway University project. After three years of being on files, it will finally start in August.

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What’s in Progress


If the UPA government shied away from finalising the Ahmedabad-Mumbai Bullet Train project, the NDA government lost no time in approving it. It advanced the deadline by a year to 2022 as Modi took his Japanese counterpart Shinzo Abe to Ahmedabad last year to lay the foundation stone for the project. The land acquisition process has started, and the project is on course.

The induction of modern, engine-less train sets, the first proper rolling stock upgrade since the LHB coaches in India, will happen later this year. Total conversion to LHB from conventional coaches has picked up pace. More stations are getting free WiFi coverage. Modi has asked Railways to review its 100 per cent electrification process, and the yearly target is being actively pursued.

What’s Stuck

Revenue generation remains a problem area for Railway policymakers. Railways may have found sources of funding for spending on capital works, but earning money to run the house and make a profit remains a problem in the face of mounting expenses. The NDA government was unable to effect a straight hike in fares — considered long overdue to minimise cross-subsidiation from freight. The PM nudged Railways to effect “creeping increase in passenger fares” in early 2017, but what came was dynamic pricing in premium trains as “flexi-fare”. This earned Railways Rs 800 crore in a year as well as a lot of criticism for the “sleight of hand” approach.


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Piyush Goyal urges railways, power, coal ministries to work in coordination for 24X7 power supply Piyush Goyal took over the Railways ministry in September 2017. (Express photo)

Unable to earn enough money from non-conventional sources — even freight earnings have remained sub-optimal vis-à-vis targets — the operating ratio of the transporter was 98.5, the worst ever, last fiscal. Railways is desperately looking for ways to earn non-fare revenue. Every study it has commissioned says the potential is huge, but nothing has materialised.

The station redevelopment project was a flop. Committed to redevelop 635 stations as commercial profit centres with private investment, only Habibganj and possibly Gandhinagar in Gujarat are being readied. Railways is still navigating its way through the project at the policy level.

The station CCTV coverage project, a pet project of the PM, has also been somewhat of a non-starter despite assured funding. The Dedicated Freight Corridor, without a proper push in the past three years, is only now showing signs of activity as the ministry is monitoring it. But it is still far from being fully commissioned. Only a small portion of it will be ready by the time this government’s term ends, and the entire project will be complete by March-April 2020.

First published on: 23-05-2018 at 02:48:47 am
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