Indian Railways: The Lifeline Of The Indian Economy

The 162-year-old Indian Railways (IR) is a na7onal asset that operates more than 19,000 trains and
7,112 sta7ons and is Asia’s second-largest and the world’s fourth-largest railway system.

By enabling geographic connec7vity, ci7zen mobility, and commercial ac7vity, as well as providing
world-class logis7cs and transporta7on infrastructure, IR plays a cri7cal role in facilita7ng the
country’s economic and social development.

The Indian Railways’ organisa7onal structure is divided into 17 zones, which are further subdivided
into 68 divisions, each headed by a divisional headquarter.

With a workforce of 13 lakh people, the IR is also one of the country’s largest employers.

Railways in India

• In India, railways are the primary mode of freight and passenger transporta7on.

• Railways also enable people to engage in a variety of ac7vi7es, such as business, sightseeing,
pilgrimage, and the transporta7on of goods over long distances.

• For more than 150 years, Indian Railways has served as a major integra7ng force, in addi7on
to being a vital mode of transporta7on.

• Railways in India connect the country’s economic life and speed up the development of
industry and agriculture.

• Physiographic, economic, and administra7ve factors have had a significant impact on the
distribu7on paTern of the railway network in the country.

• The northern plains, with their vast level of land, dense popula7on, and abundant
agricultural resources, provided the best condi7ons for their development.

• However, a large number of rivers with wide beds necessitated the construc7on of bridges.
Railway tracks are built through low hills, gaps, and tunnels in the peninsular region’s hilly
terrain.

• Despite these factors, the Indian railway system is expanding at a steady pace.

• Indian Railways will be the third-largest in the world in five years, accoun7ng for 10% of the
global market.

• One million jobs could be created by Indian Railways, one of the country’s largest employers.

• Several businesses have benefited from railway support and expansion. The rise of the tex7le
industry in Mumbai, the jute industry in Kolkata’s environs, and the coal industry in
Jharkhand can all be aTributed to the construc7on of railway networks.

• Raw materials as well as finished goods are delivered to produc7on sites by railways.

• Railways have played a significant role in agricultural development. Agriculture was only able
to become commercialised with the assistance of the railway. Farmers can now sell their
agricultural products to far-flung loca7ons, as well as sell them for a profit on the global
market.
 • Perishable foods, agricultural implements, and other items can be transported quickly over
long distances thanks to railways.

Growth in Indian Railways

• India’s railway sector has a total track length of 126,366 kilometres, with 7,335 sta7ons along
a 67,956-kilometre route.

• On a daily basis, the railways run approximately 13,523 passenger trains and 9,146 freight
trains.

• Indian Railways carried 8.1 billion passengers in the fiscal year ending March 2020. From
January 1, 2021, to December 31, 2021, India’s railway sector loaded 1029.94 MT of freight,
an increase of 18% over the previous year.

• With over 1.3 million employees, Indian Railways is India’s single largest employer and the
world’s eighth-largest.

• In FY22, gross revenue was Rs 85,588.96 crore (US$ 11.44 billion) (un7l September 2021).

• The Indian government has priori7sed inves7ng in railway infrastructure by enac7ng a

number of investor-friendly policies, including Foreign Direct Investment (FDI), to improve
freight and high-speed train infrastructure.

• In fact, a number of domes7c and interna7onal firms are considering inves7ng in Indian rail
projects.

• Some ini7a7ves taken by the government are as follows:

• IR released a Na7onal Rail Plan for India – 2030 with the goal of crea7ng a “future-ready”
railway system by 2030. The plan’s goal is to build capacity ahead of demand so that it can
meet future demand growth un7l 2050 while also increasing railways’ modal share in freight
traffic to 45 percent.

• India and Nepal signed an MoU (Memorandum of Understanding) in October 2021 for a
proposed US$ 3.15 billion railway line connec7ng Kathmandu and Raxaul, India’s border
town.

• The Central Government approved the construc7on of a 235-kilometre semi-high-speed rail

corridor between Pune and Nashik, Maharashtra, in June 2021. The project will cost Rs.
16,039 crores (US$ 2.20 billion) to build.

• The arch closure of the under-construc7on Chenab Bridge, the world’s highest railway
bridge, was completed in April 2021 by Indian Railways. Chenab Bridge will be 1315 metres
long and 35 metres taller than Paris’ Eiffel Tower. The bridge’s total cost is es7mated to be Rs.
1,486 crore, with a design life of 120 years.

• The government allocated Rs. 110,054.64 crore (US$ 15.19 billion) to the Ministry of
Railways in the Union Budget 2021-22.

• The Indian Railways is looking forward to another year of infrastructure growth with
innova7ve and sustainable ini7a7ves in 2022, following unprecedented growth in 2021.

The significance of railways in the Indian economy

 • Freight revenues for Indian Railways were $16 billion in 2021.

• By building infrastructure to support 45 percent of the economy’s modal freight share,

India’s railway sector aims to contribute about 1.5 percent to the country’s GDP.

• The Indian Railways saw an 18% increase in freight loading from 2021-22 to December 31,
2021.

• According to the recently released Economic Survey, India’s railways will become one of the
most important sectors in the country’s growth.

• In 2021-22, the Capital Expenditure (Capex) will be five 7mes higher than in 2014. By 2023,
the Indian Railways want to be completely electrified.

• The Na7onal Railway Plan envisages the crea7on of a future-ready railway system capable of
not only mee7ng passenger demand but also increasing the modal share of railways in
freight to 40-45 percent from the current level of 26-27 percent.

Conclusion

For both passengers and goods, the railway is one of the most efficient and cost-effec7ve modes of
transport. With the large number of passengers who use them on a daily basis, they are the
economic lifeblood of India. They’re also important for transpor7ng coal, metals, petroleum,
chemical manures, and food grains. Indian Railways is also the preferred carrier for the automobile
industry.
Ques?on 1: Indian Railway has a great unifying influence on the Indian Economy. Discuss this
statement in light of moderniza7on and digi7za7on in this sector. (250 Words)

Ques?on 2: What steps can be taken to increase the capacity and share of the Indian fleet in global
trade? Discuss. (150 Words)

06 Feb 2023 | GS Paper 1 | Geography

Approach / Explaina?on / Answer

Answer 1

Approach

§ Write a brief introduc7on about the importance of the Indian railway in the Indian economy.

§ Discuss the impact of moderniza7on and digi7za7on of the Indian Railway on the Indian
economy.

§ Write an effec7ve and holis7c conclusion.

Introduc?on

§ The Indian Railways is a crucial component of the Indian economy, connec7ng people, goods
and services across the country.

§ The railway network has played a significant role in the development and growth of the
Indian economy by providing employment opportuni7es, boos7ng economic ac7vity, and
facilita7ng the movement of goods and services.

§ The vast reach of the railway network has also helped to bridge the gap between urban and
rural areas, connec7ng remote regions to the rest of the country and contribu7ng to the
economic development of these regions.

§ With the ongoing moderniza7on and digi7za7on of the sector, the Indian Railways is poised
to play an even more important role in the Indian economy, driving growth, improving
efficiency and convenience for passengers and freight customers, and contribu7ng to the
overall development of the country.

Body

§ The moderniza?on and digi?za?on of the Indian Railway has had a posi?ve impact on the
Indian economy in several ways:

o Increased Efficiency: The introduc7on of advanced technologies such as

computerized 7cke7ng, GPS-based train tracking, and e-commerce plaoorms for
goods transporta7on has improved efficiency and convenience for passengers and
freight customers. This has led to increased demand for railway services, boos7ng
economic ac7vity and genera7ng revenue for the government.

o Bridging the Gap between Urban and Rural Areas: The Indian Railways has helped
bridge the gap between urban and rural areas by connec7ng remote regions to the
rest of the country. This has led to the development of new markets and industries,
leading to economic growth and improved living standards in these areas.
 o Improved Cost Structure: The digi7za7on of the sector has enabled the Indian
Railways to streamline its opera7ons, reducing costs and increasing profitability. This
has allowed for reinvestment in the sector, further modernizing infrastructure and
improving services.

o Employment Opportuni?es: The Indian Railways is a major employer in India,

providing employment opportuni7es to millions of people. The moderniza7on and
digi7za7on of the sector is expected to create new job opportuni7es in areas such as
technology, engineering, and maintenance, further boos7ng economic ac7vity.

o Improved Transporta?on of Goods: The digi7za7on of the Indian Railways has

improved the transporta7on of goods, reducing transit 7me, increasing reliability,
and improving the overall compe77veness of the Indian economy in global trade.

Conclusion

The moderniza7on and digi7za7on of the Indian Railway has had a profound impact on the Indian
economy, contribu7ng to increased efficiency, bridging the gap between urban and rural areas,
improved cost structures, job crea7on, and improved transporta7on of goods. The sector con7nues
to play a key role in the Indian economy, driving growth, and contribu7ng to the overall development
of the country. The Indian government and private sector have a crucial role to play in ensuring that
the moderniza7on and digi7za7on of the sector con7nues, and that the sector remains a key
contributor to the Indian economy for years to come.

Answer 2

Approach

§ Write a brief introduc7on about the Indian fleet and its importance.

§ Discuss the required measures to increase the capacity of the Indian fleet which ul7mately
boost its contribu7on in global trade.

§ Write a holis7c and appropriate conclusion.

Introduc?on

§ The Indian fleet, consis7ng of ships and other vessels, plays a crucial role in the Indian
economy and global trade.

§ With a long coastline, a large popula7on, and a growing economy, India has the poten7al to
become a major player in the global shipping industry.

§ India's fleet strength, as men7oned in the Economic Survey of 2022, has increased to 1,463
vessels. This means that India now has a large fleet of ships that contribute to its global
trade.

Body

§ There are several steps that can be taken to increase the capacity and share of the Indian
fleet in global trade:

o Investment in modern infrastructure:

 • The Indian government can invest in the development of modern ports,
shipyards, and other mari7me infrastructure to enhance the
compe77veness of the Indian fleet.

• The capacity of 13 major ports, which was 871.52 million tonnes per annum
(MTPA) at the end of March 2014, increased 79 per cent to 1,560.61 MTPA
by the end of March 2021.

• This will help reduce logis7cs costs, increase efficiency and aTract more
foreign trade.

o Encouragement of private investment:

• Private sector investment in the shipping industry can be encouraged

through tax incen7ves, subsidies, and other forms of financial support.

• This will increase the availability of capital for the development of new ships,
the expansion of exis7ng fleets, and the acquisi7on of new technologies.

o Promo?on of mari?me industries:

• The Indian government can promote the development of mari7me

industries, such as shipbuilding, ship repair and maintenance, and related
services.

• his will help increase the size of the Indian fleet and enhance its
compe77veness in global trade.

• There are 802 projects worth investment of Rs 5.54 lakh crore for
implementa7on under the Sagarmala program by 2035.

• Out of this, 181 projects worth Rs 94,712 crore have been completed and
223 projects worth Rs 2.11 lakh crore are under implementa7on.

o Development of a skilled workforce:

• The Indian government can invest in training programs to develop a skilled

workforce for the shipping industry.

• This will help aTract more investment and improve the compe77veness of
the Indian fleet.

o Streamlining of regula?ons and policies:

• The Indian government can streamline regula7ons and policies to reduce the
administra7ve burden and enhance the compe77veness of the Indian fleet.

• The government’s ambi7ous Sagarmala project, the Survey said the na7onal
program aims at accelera7ng economic development in the country by
harnessing the poten7al of India’s 7,500 km long coastline and 14,500 km of
poten7ally navigable waterways.

• This includes reducing red tape, simplifying procedures, and promo7ng

transparency in decision-making.

o Strategic partnerships and collabora?ons:

 • The Indian government can pursue strategic partnerships and collabora7ons
with other countries to increase the compe77veness of the Indian fleet. For
example, India can collaborate with other countries in the development of
new technologies, joint ventures in shipbuilding, and the crea7on of
shipping consor7a.

Conclusion

§ The Indian fleet has a significant role to play in global trade, and there are several steps that
can be taken to increase its capacity and share. By inves7ng in modern infrastructure,
encouraging private investment, developing a skilled workforce, promo7ng mari7me
industries, pursuing strategic partnerships and collabora7ons, and streamlining regula7ons
and policies, the Indian government can help enhance the compe77veness of the Indian
fleet and increase its contribu7on to the Indian economy and global trade.
The Indian Economy is heavily dependent on transporta7on. The Indian Railways is the country's
lifeline. It is not just a passenger and freight transporter, but also a social welfare organiza7on,
thanks to its extensive network spanning the length and width of India. The Indian Railways started
opera?ng on April 16, 1853. Indian Railways (IR) operates the world's fourth-longest rail network. It
has a 1,23,236 kilometer network and around 21,000 trains that transport 23 million passengers and
3 million tonnes of freight per day. In this ar7cle, we will study Railways, which is important for UPSC
Examina7on. Indian Railways - An Overview

• Indian Railways is one of the largest rail networks in the world. The Indian Railways network
spans 1,23,236 kilometers, with 13,452 passenger trains and 9,141 freight trains
transpor?ng 23 million passengers and 3 million tonnes of freight daily from 7,349 stops.

• Under single control, India's railway network is the fourth largest in the world and the
second-largest in Asia.

• The Indian Railway is the country's principal artery, oqen known as the lifeline of India, and
it transports both freight and passengers.

• It adds to the country's na7onal growth and economic integra7on.

Other Relevant Links

Energy sector Health sector

Educa7on sector Road sector

Ports Airports

Growth and Development

Growth and Development of Indian Railways

• On April 16, 1853, the first railway line in India was inaugurated for public traffic
between Mumbai and Thane, covering a distance of 34 kilometers.

• Meanwhile, railway lines were being built in the eastern por7on of the country, and the first
sec7on of the East Indian Railway, which ran 37 kilometers from Howrah to Hugli, was
inaugurated on August 15, 1854.

• In 1859, the Kanpur-Allahabad line was inaugurated.

• In 1856, the southern sec?on of the country received its first 105-kilometer railway line,
which ran from Royapuram to Arcot.

• The all-rail route between Kolkata and Mumbai began opera?on in 1870, and the mainline
from Mughal Sarai to Lahore (now Pakistan) was finished in 1871.

• The Mumbai-Chennai route was also established in 1871.

• Consequently, most of India's major ci7es were connected by rail in just 18 years, from 1853
to 1871.

• Aqer the United States (2, 27,736 km), Russia (2, 22,293 km), and China (2, 22,293 km), India
now has the second-largest railway network in Asia and the fourth-largest in the world
(87,157 km). However, India is the world's leading country in terms of passengers per
kilometer earned.

• The railway is the country's largest public-sector opera7on, with a network of 6,906 sta?ons
and a fleet of 7,681 locomo?ves, 39,852 passenger service cars, 4,904 other coaching
vehicles, and 2,14,760 wagons dispersed over a 63,122 km route.

• Indian Railways operate through some of the world's most difficult terrains, such as the 55-
kilometer rail line between Jammu and Udhampur, which would be increased to 837
kilometers with the comple7on of the Konkan railway route.

• With over 10 lakh personnel working in the opera7onal and commercial parts of railroads,
India's railway system is the largest government endeavor and the largest employer in the
world.

• The longest train route in India runs from Assam's Dibrugarh to Tamil Nadu's Kanyakumari.

Significance

Significance of Railways in India

• Both long-distance and suburban traffic, railways are the most cost-effec7ve and convenient
mode of passenger transporta7on.
 • Railways have supported the development and expansion of several businesses. The
construc7on of railway networks is partly responsible for the rise of the tex7le industry in
Mumbai, the jute industry in areas surrounding Kolkata, the coal industry in Jharkhand, and
so on.

• Railways assist in the delivery of raw materials and other facili7es to produc7on sites, as well
as finished items to markets.

• Agriculture owes a large part of its development to railways. Only with the help of the
railway has agriculture been able to become commercialized. Farmers can now sell their
agricultural products to faraway loca7ons and even sell them on the global market for a
profit.

• Railways aid in the rapid movement of perishable foodstuffs, agricultural implements, and
other items over long distances.

• Railways have also played an important role in distribu7ng inven7ons and new ideas by
bridging the gap between ci7es and the countryside (rural areas).

• Railways contribute to the provision of the na7onal market by promo?ng price equaliza?on.
The railway is linked to major ports, which aids in the promo7on of interna7onal trade.

• The railway contributes to the country's defense and internal security by allowing troops,
defense equipment, and other items to be transported quickly to remote loca7ons.

• In the event of natural disasters like droughts, floods, famines, earthquakes, and other
natural calami7es, railways play a cri?cal role in reducing people's suffering.

• This is accomplished by transpor7ng relief and rescue teams as well as necessary supplies to
the afflicted areas, thereby saving people from misery and starva7on.

Factors

Factors Affec?ng Railways

Geographical Factors

• The North Indian plain: The North Indian plain, with its level ground, high popula7on
density, and abundant agriculture, provides the best circumstances for railway growth. The
presence of a significant number of rivers, on the other hand, necessitates the construc7on
of expensive bridges.

• The plateau of South India: The plateau region of south India is not as suited for railways as
the North Plain area. Railways find it difficult to build new projects because of the undula7ng
terrain, as well as opera7onal issues. There is also a lower popula7on density.

• The Himalayan region: Because of its rough landscape, the Himalayan region in the north is
nearly en7rely devoid of railways. The foothills are home to railway terminals such as Jammu
Tawi, Kotdwar, Dehra Dun, Kathgodam, and others. In the Himalayan region, there are some
low gauge railway tracks.

• The Sandy areas of Rajasthan: Rajasthan's sandy areas are likewise not very conducive to
railways. Un7l 1966, there was no railway between Jodhpur and Jaisalmer. The existence of
 fewer people, a lack of industries, adverse terrain, and other factors all contribute to a lower
railway concentra7on.

• Forested loca?ons: Forested areas in Madhya Pradesh and Orissa, West Bengal's deltaic
wetlands, the Rann of Kachchh's marshy sec7ons, and the Sahyadri's mountainous tract are
all adverse for railway construc7on. To reach coastal trailheads like Mumbai, Vasco-de-Gama,
Mangalore, and Kochi, the Sahyadri can only be crossed by gaps like Thalghat, Bhorghat, and
Palghat.

Economic Factor

• Railways grow more rapidly in economically developed areas, where the need for train
networks is greater. For example, Delhi, the Northern Plains, Mumbai, and so on.

• We find the maximum density of railways around large urban and industrial hubs like
Jamshedpur, as well as loca7ons rich in mineral and agricultural resources, due to economic
7es.

Poli?cal and Administra?ve factors

• India's current railway system is a legacy of Bri7sh rule. The Bri7sh administra7on planned
the route and paTern of railway lines so that they could take advantage of India's precious
raw materials for the benefit of their businesses and flood Indian markets with completed
Bri7sh goods.

• Furthermore, the Bri7sh desired to maintain their military superiority, which necessitated
the rapid transfer of troops and arms, necessita7ng the development of railways. As a result,
the major ports of Mumbai, Kolkata, and Chennai were given primary priority. To promote
imports and exports, many ports were connected to their hinterlands by railway lines. The
railway network sprang out of the ports and extended throughout the country.

• Poli7cal circumstances have led to the closure of the rail coach manufacturing in Rai Bareli
(since it is the cons7tuency of some of the major poli7cians of the country).
Conclusion

Conclusion

The Indian Railways' pricing model needs to be revisited in order to make the passenger and freight
divisions sustainable. Tariffs should be compe77ve with road transporta7on costs. Crea7ng a level
playing field for private players will necessitate the establishment of an independent regulator. In
order to achieve this goal, the process of establishing the Rail Development Authority, which has
already been approved by the government, must be accelerated. The Bibek Debroy commiTee's
recommenda7ons, including the expansion of the Indian Railways manufacturing firm and the
corpora7za7on of core railway ac7vi7es, must be implemented. The essen7al need is to find a
balanced approach that incorporates the benefits of both private and public firms while also
improving the image of Indian Railways as it con7nues to serve the world's largest democracy.

Z
Railways: A Major Public Transporta?on Contribu?ng To Na?on s Growth

India, with its vast and diverse landscape, relies heavily on its robust transporta7on infrastructure to
connect people, goods, and services across the na7on. Among the various modes of transport, the
Indian Railways stands tall as a symbol of efficiency and connec7vity. Let’s explore the mul7faceted
contribu7ons of the Indian Railways to the na7on's growth and development.

Versa7lity of Indian Railways

The Indian Railways is not just a transporta7on system; it's a colossal network intricately woven into
the fabric of the na7on. As the fourth-largest na7onal railway system globally, it boasts a massive
track length of 128,305 km, with 60,451 km electrified. With over 1.2 million employees, it stands as
the world's tenth-largest employer. The Indian Railways is increasingly becoming the backbone of the
na7on's GDP, emphasizing its vital role in the country's economic landscape.

Major Contribu7on of Indian Railways to Na7on’s Growth

When it comes to addressing the contribu7on of Indian Railways to the na7on's growth, we all just
think about the revenue. But it is not just about revenue, rather it is more about contribu7ng to
different important segments of a na7on, that includes economy as well as defense, transporta7on,
travel, and employment. Following are the major contribu7ons of the Indian Railways to the na7on's
growth.

Transport Connec7vity

The Indian Railways plays a pivotal role in ensuring seamless connec7vity across the na7on. On a
daily basis, approximately 23 million passengers rely on the rail network, making it an indispensable
mode of daily commu7ng. Moreover, efficient rail freight carriers move tons of goods, connec7ng
different parts of the country to the na7onal capital and major ci7es. Without the railways, the scale
and efficiency of transporta7on in India would be unimaginable.

Revenue Genera7on

The direct revenue generated by the Indian Railways is a significant source of income for the
government. This revenue not only sustains the railways but also contributes to the overall economic
development of the na7on.

Employment Genera7on

With a workforce exceeding a million, the Indian Railways stands as a major employer in the country,
con7nually genera7ng employment opportuni7es, especially for the youth. This not only supports
livelihoods but also contributes to the socio-economic development of the na7on.

Travel Experience

Beyond its u7litarian func7on, the Indian Railways offers an unparalleled travel experience through
luxury trains like The Deccan Odyssey, Maharajas’ Express, The Golden Chariot, Royal Rajasthan on
Wheels, and Palace on Wheels. While these journeys are expensive, they provide a remarkable
experience to travelers, contribu7ng not only revenue but also enhancing the na7on's global
reputa7on in luxury tourism.

Manufacturing Opportuni7es
The "Make in India'' ini7a7ve has found resonance in the Indian Railways, offering substan7al
opportuni7es to the country's manufacturing industry. The flagship Vande Bharat Express is a
testament to this ini7a7ve, with every part and component supplied by local manufacturers and
suppliers, boos7ng the domes7c economy.

Image credit: TwiTer

Special Services for Defence

Recognizing the cri7cal role of defense, the Indian Railways provides special services dedicated to
military goods transporta7on and the movement of defense personnel. This strategic support
underscores the railways' commitment to support na7onal security.

Successful Subsidiaries

In addi7on to the primary rail network, several successful subsidiary public sector undertakings
(PSUs) operate under the Ministry of Railways. These en77es, such as Rail Vikas Nigam, Indian
Railway Catering and Tourism Corpora7on, Container Corpora7on of India, Indian Railway Finance
Corpora7on, and Ircon Interna7onal, play crucial roles in enhancing the overall efficiency and
effec7veness of the Indian Railways.

MSL’s Contribu7ons to Indian Railways

MSL stands as a premier manufacturer and supplier of parts and components for Indian Railways,
playing a pivotal role in shaping the landscape of Indian Railways. Our extensive contribu7ons have
been integral to numerous projects, with notable involvement in key ini7a7ves at ICF Chennai, MCF-
Raebareli, and RCF Kapurthala. A highlight of our commitment to excellence is the significant
contribu7on made to the na7on's pride, the "Vande Bharat" train. MSL's dedica7on to innova7on
and quality underscores our crucial role in enhancing the efficiency and reliability of the Indian
Railways system.

Conclusion

In conclusion, the Indian Railways is not just a means of transporta7on; it is an integral part of the
na7on's growth story. From facilita7ng connec7vity and genera7ng revenue to crea7ng employment
opportuni7es and contribu7ng to the "Make in India" ini7a7ve, the Indian Railways con7nues to play
a monumental role in shaping the trajectory of the na7on's development. As we look ahead, it is
impera7ve to recognize and appreciate the mul7faceted contribu7ons of the Indian Railways in
steering India towards a more connected and prosperous future.
Rerou?ng Indian Railways' Future

This editorial is based on “Roadblocks to Indian Railways’ ‘Mission 3,000 MT” which was published
in Economics and PoliBcal Weekly on 14/09/2024. The arBcle highlights the significant decline in
Indian Railways' freight transport share and its impact on India's net-zero ambiBons. It emphasizes
the need for strategic reforms and capacity enhancements to achieve the NaBonal Rail Plan's
freight targets by 2030-31.

For Prelims: Indian Railways, Na?onal Rail Plan, Dedicated Freight Corridors, Na?onally
Determined Contribu?on, Bharat Gaurav trains, Comptroller and Auditor General of
India, Kavach, Balasore triple train crash.

For Mains: Significance of Railways for India, Major Issues Related to Indian Railways.

Indian Railways, opera7ng the world's fourth-largest rail network, has been facing significant
challenges in maintaining its dominance in the country's transporta7on sector. Despite an increase in
route kilometers and track length since 1950, its share in freight transport has declined drama?cally
from 85% in 1951 to less than 30% in 2022. This decline poses a serious challenge to India's net-zero
ambi7ons and efforts to decarbonize the transport sector. The Na?onal Rail Plan aims to reverse this
trend by targe7ng a 45% rail share in freight transport by 2030-31, with an ambi7ous goal of 3,600
million tonnes of freight loading.

However, the railway's performance indicators reveal concerning trends. The growth rates of
passenger and freight movement have slowed, par7cularly during the Twelhh Five-Year Plan period
(2012-13 to 2016-17), indica7ng a decoupling of GDP and traffic performance. To achieve its
ambi7ous targets, Indian Railways needs to transform its business strategies, diversify revenue
sources, and address capacity constraints and service quality issues.

What is the Significance of Railways for India?

§ Economic Backbone: Indian Railways plays a pivotal role in India's economic development,
ac7ng as a crucial link in the supply chain.

o It transported 1,512 million tonnes of freight in 2022-23, contribu7ng significantly

to industrial and agricultural growth.

o The establishment of Dedicated Freight Corridors, or DFCs, is expected to lower

logis7cs costs through the use of higher axle load trains

§ Driver in Achieving India’s Climate Goals: As India strives to meet its Na?onally Determined
Contribu?on (NDC) target of reducing emission intensity of GDP by 45% from 2005 levels by
2030, railways emerge as a key player in sustainable transporta7on.

o Rail transport is significantly more energy-efficient than road transport, with rail
freight genera?ng less than one-fihh of the greenhouse gas emissions of road
transport per ton kilometer

o The shiq from road to rail for freight transport could significantly contribute to
India's climate goals.

§ Affordable Mobility: Indian Railways serves as a great social equalizer by providing

affordable transporta7on to millions of Indians.
 o The railways' revenue earnings were up by 73% in the passenger segment during
April-January 2023.

o The railways' 7ered pricing system ensures accessibility across economic strata.

§ Bolstering Na?onal Security and Integra?on: Railways play a crucial role in na7onal security
and integra7on.

o They are vital for rapid mobiliza?on of troops and equipment to border areas. The
strategic importance is evident in projects like the Bilaspur-Manali-Leh rail
line, which will provide all-weather connec7vity to the Ladakh region.

o Addi7onally, railways foster na7onal integra7on by facilita7ng cultural exchange and

tourism.

• The recently launched Bharat Gaurav trains, showcasing India's cultural

heritage, are an example of how railways contribute to na7onal iden7ty and
tourism.

§ Urban Lifeline: Railway-based urban transport systems are reshaping India's ci7es. Over the
last 10 years, 700 km of new metro lines have been made opera?onal, bringing the total
opera7onal length to 945 km, and extending metro services to 21 ci?es across the country,

o These systems are crucial for sustainable urban development, reducing traffic
conges7on and air pollu7on.

o For instance, Delhi Metro, carrying about 6.5 million passengers daily,
has helped reduce CO2 emissions annually.

o The integra7on of metro systems with other modes of transport is crea7ng efficient
urban mobility ecosystems.

§ Bridging the Urban-Rural Divide: Railways act as a catalyst for balanced regional
development. Projects like the Northeast Fron?er Railway's expansion have opened up
remote areas for economic ac7vi7es.

o The 111 km Jiribam-Imphal railway line, once completed, will be a game-changer for
Manipur's connec7vity and economy.

o Such projects not only improve connec7vity but also bring ancillary development
in educa?on, healthcare, and local industries, helping bridge the urban-rural divide.

What are the Major Issues Related to Indian Railways?

§ Declining Modal Share in Freight Transport:Indian Railways has experienced a significant

decline in its share of freight transport, from 85% in 1951 to less than 30% in 2022.

o This shiq poses challenges to India's environmental goals and transport sector
efficiency.

o The Na7onal Rail Plan aims to increase rail's freight share to 45% by 2030-31, but
current projec7ons fall short.
 • For instance, even with an op7mis7c 7% CAGR, annual freight loading is
projected to reach only 2,598 MT by 2030-31, far below the 3,600 MT
target.

• This decline reflects broader issues of compe77veness and adaptability in

the face of changing economic structures and transporta7on needs.

§ Financial Performance and Opera?ng Ra?o: The railway's financial health has been
deteriora7ng, as evidenced by its increasing opera?ng ra?o (OR).

o The OR has risen from a low of 78.7% in 2006-07 to breaching the 100% threshold in
2021-22.

• This means Indian Railways is spending more than it earns, raising serious
concerns about its financial sustainability.

o The Comptroller and Auditor General of India has also flagged that the reported OR
may not reflect the true financial performance.

• For instance, in 2019-20, if actual pension expenditures were considered,

the OR would have been 114.35% instead of the reported 98.36%, indica7ng
a more severe financial strain than officially acknowledged.

§ Over-reliance on Coal for Revenue: Indian Railways heavily depends on coal transport for its
freight revenue, with coal contribu?ng 47% of freight earnings in 2021-22.

o This over-reliance poses a significant risk as India moves towards renewable energy
sources.

o The Ministry of Power's recent direc7ve (January 2023) to use "Rail-Ship-Rail" mode
for coal transport to certain states may further reduce revenue from coal transport.

• The lack of diversifica7on in freight revenue sources makes Indian Railways

vulnerable to shiqs in energy policy and market demands, poten7ally
impac7ng its long-term financial stability.

§ Capacity Constraints and Infrastructure Limita?ons: Despite increasing its running track
length from 51,315 km in 1950-51 to 102,831 km in 2021-22, Indian Railways faces
significant capacity constraints.

o This limits its ability to meet growing transporta7on demands and compete with
other modes.

o The pace of network expansion has not kept up with overall freight
demand growth in the economy.

o This has contributed to the declining share of railways in freight

movement, par7cularly for bulk commodi7es.

o For example, despite price inelas7city, the share of railways in cement transport
declined from 2005-06 to 2019-20, indica7ng that factors beyond pricing, such as
capacity and service quality, are influencing shipper choices.

§ Technological Adapta?on Lag: Indian Railways faces challenges in adop7ng new

technologies and modernizing its opera7ons to meet evolving market demands.
 o The container service, along with other goods, contributes only 12% to freight
loading and has remained stagnant.

o This indicates a lag in adap?ng to changing freight pamerns, especially in high-value

sectors like automobiles.

o Kavach, an automated train protec7on safety system aimed at preven7ng collisions

on the same track, remains largely unimplemented.

• It's been 4 years since the Indian Railways began deploying the device, yet by
early August,2024 Kavach had been installed only on 1,456 km of the South
Central Railway, accoun7ng for just 3% of the na?onal rail network.

§ Safety Concerns and Derailments: Indian Railways con7nues to grapple with safety issues,
par7cularly derailments.

o There has been an average of 44 consequen?al train accidents every year in the
five-year period ending 2022-23.

• The Balasore triple train crash in June 2023,and Sabarma? Express

Derailment in August 2024 highlighted persistent safety vulnerabili7es.

o Factors contribu7ng to derailments include outdated track infrastructure, human

error, and signal failures.

• The railways' target of "zero accidents" remains elusive, necessita7ng

con7nued focus on track renewals, modern signaling systems, and enhanced
safety protocols.

§ Slow Progress in High-Speed Rail Projects: India's ambi7ous high-speed rail projects,
par7cularly the Mumbai-Ahmedabad bullet train corridor, have faced significant delays and
cost escala7ons.

o Originally planned to be opera7onal by 2023, the project's comple7on date has

been pushed to 2028 due to land acquisi7on issues.

o The slow progress in high-speed rail implementa7on puts India behind global
compe?tors and delays the moderniza7on of rail transport, affec7ng long-term
compe77veness and economic growth.

§ Human Resource Management and Skill Gaps: Indian Railways, one of the world's largest
employers, faces challenges in human resource management and skill development.

o There's a growing skill gap as the railway modernizes its opera7ons. For instance,
the introduc7on of semi-high-speed trains like Vande Bharat requires specialized
skills in maintenance and opera7ons.

o Union Railway Minister stated in Rajya Sabha that more than 2.50 lakh posts remain
vacant in the Indian Railways as of July, 2023.

o Addressing these vacancies while ensuring the workforce is equipped with relevant
skills for modern railway opera7ons is a significant challenge.

Key CommiTees Related to Reforms in Indian Railways

 § Vinod Rai Commimee (2015):

o Establish an independent Railway Safety Authority with statutory powers.

o Create a Railway Accident Inves7ga7on Board for impar7al inquiries.

o Form a separate Railway Infrastructure Company to manage assets.

o Introduce a performance-linked incen7ve scheme for railway employees.

§ Rakesh Mohan Commimee (2010):

o Revamp the accoun7ng system to follow Indian GAAP.

o Expand into FMCG, IT, containerized cargo, and automobile sectors.

o Priori7ze long-distance transport, speed upgrades, and high-speed rail corridors.

o Enhance connec7vity to industry clusters and major ports.

o Develop logis7cs parks at key hubs.

What Measures can be Adopted to Revitalize Indian Railways?

§ Implement Advanced Traffic Management Systems: Indian Railways should accelerate the
deployment of advanced traffic management systems like Kavach across its network.

o This automated train protec7on system can significantly improve safety and
opera?onal efficiency.

o For example, expanding Kavach beyond the current 1,456 km to cover at least 20% of
the network within the next two years could dras?cally reduce collision risks.

o This implementa7on should be priori?zed on high-traffic corridors and accident-

prone sec?ons.

• The system could be integrated with AI-powered predic?ve

maintenance tools to proac7vely iden7fy poten7al track or signal failures,
further enhancing safety and reducing down7me.

§ Diversify Freight Poroolio and Enhance Logis?cs Services: To reduce dependence on coal
transport and adapt to changing market demands, Indian Railways should aggressively
diversify its freight poroolio.

o This could involve developing specialized services for high-value, ?me-sensi?ve

goods like pharmaceu?cals, electronics, and perishables.

o For instance, crea7ng a network of temperature-controlled containers and

dedicated express freight corridors could aTract new customers from these sectors.

o Addi7onally, partnering with e-commerce giants to create specialized rail-based

logis?cs solu?ons could tap into the growing online retail market.

§ Accelerate High-Speed Rail and Semi-High-Speed Projects: While addressing the delays in
the Mumbai-Ahmedabad bullet train project, Indian Railways should simultaneously focus
on expanding its network of semi-high-speed trains like Vande Bharat.
 o This expansion should be complemented by upgrading exis7ng tracks and signaling
systems to support higher speeds.

o For example, modernizing the Golden Quadrilateral network to consistently support

speeds of 160-200 km/h could significantly reduce travel 7mes on key routes,
making rail more compe77ve with air travel for intercity journeys.

§ Develop Sustainable and Energy-Efficient Opera?ons: Indian Railways should accelerate its
transi7on to renewable energy and energy-efficient technologies.

o This could involve increasing the electrifica?on of tracks from the current levels to
100%, coupled with a significant expansion of solar and wind power genera7on
along railway lines.

o For example, installing solar panels on sta?on roohops and unused railway
land could generate a substan7al por7on of the railways' energy needs.

§ Modernize Freight Terminals and Develop Mul?modal Logis?cs Parks: Indian Railways
should focus on modernizing exis?ng freight terminals and developing new mul?modal
logis?cs parks to improve efficiency and aTract more freight traffic.

o This could involve automa7ng loading and unloading processes, implemen7ng

advanced inventory management systems, and crea7ng seamless intermodal
connec7ons.

o These parks should be equipped with advanced container handling equipment,

real-?me tracking systems, and integrated customs clearance facili7es to offer end-
to-end logis7cs solu7ons.

§ Enhance Sta?on Redevelopment and Commercial U?liza?on: Accelerate the sta7on

redevelopment program to transform major railway sta7ons into world-class transit hubs and
commercial centers.

o This ini7a7ve should go beyond cosme7c improvements to include smart city

features, mixed-use developments, and enhanced passenger ameni7es.

o For example, the redevelopment of Rani Kamlapa? Railway Sta?on in Bhopal, with
its modern design, airport-like facili?es, and focus on sustainability, serves as a
model.

Conclusion

Revitalizing Indian Railways is crucial for its role in India's economy and sustainability. By tackling
challenges like declining freight share and financial sustainability through moderniza7on and
innova7ve strategies, the railways can enhance efficiency and compe77veness. Ini7a7ves such
as diversifying services and redeveloping sta?ons will significantly contribute to na7onal integra7on
and sustainable development, posi?oning Indian Railways as a key driver of India's future growth.
The Indian Railways’ Revenue Problems

For Prelims: Indian Railways (IR), Capital Expenditure (capex), Gross Budgetary Support
(GBS), Extra Budgetary Resources (EBS), Comptroller and Auditor General of India (CAG), Net Tonne
Kilometres (NTKM), Opera?ng Ra?o.

For Mains: Significant role and contribu7on of Indian Railways to the economic growth and
development.

Source: TH

Why in News?

The Indian Railways (IR) has increased its capital expenditure (capex) significantly since merging its
rail budget with the main budget. However, its opera?ng ra?o, which measures expenses against
revenue, hasn't improved.

What are the Present Concerns with Indian Railways?

§ Debt Trap Concerns:

o The Indian Railways (IR) is facing a growing concern related to rising debt. In the
absence of surplus funds, the IR has been relying on increased funding
through Gross Budgetary Support (GBS) and Extra Budgetary Resources (EBS).

• However, this reliance on EBS comes with a significant cost.The IR’s spending
on repayment of principal and interest make 17% of revenue receipts, a
sharp rise from less than 10% 7ll 2015-16.

§ Concerns Related to Economic Growth vis-a-vis Unproduc?ve Investments:

o Despite the moun7ng debt, the significant increase in capex is underpinned by the
belief that investments in the railway sector have a posi?ve ripple effect on
manufacturing, services, government tax revenue, and employment opportuni?es.

• However, it is impera?ve that the IR, as a vital organiza?on, avoids

following the path of financial instability seen in en??es like Air India.

§ The Lessening Share:

o The Indian Railways (IR) faces a significant challenge with its share in transpor?ng
key commodi?es declining over the years.

• For instance, in 2011, coal transporta7on was 602 million tonnes (MT), with
the rail share at 70%, but by 2020, coal consump7on increased to 978 MT,
while the rail share decreased to 60%.

• Similarly, the share of exim (Export-Import) containers moving to and from

ports has fluctuated between 10% and 18% since 2009-10, with the 2021-
22 figure at 13%.

§ Concerns with Net Tonne Kilometers (NTKM):

o There was an unprecedented decline in NTKM in 2015-16 and 2016-17 by 4% and 5%

respec7vely.
 • In the seven-year period ending in 2021-22, NTKM showed an annual
growth rate of 3.5%, significantly lower than the growth rate in road
transport.

What are the Long-Term Issues in the Indian Railway System?

§ Challenges in Financial Performance:

o The IR faces a significant problem with its financial performance, par7cularly the
stark contrast between its profitable freight segment and the loss-making passenger
segment.

• A 2023 report from the Comptroller and Auditor General of India(CAG)

highlighted a massive loss of Rs. 68,269 crore in passenger services which
had to be covered by profits from freight traffic.

§ Challenges in Freight Business:

o From April to July 2023, the annual growth in freight volume and revenue stands at
just 1% and 3%, respec7vely, whereas the Indian economy is growing at 7%.

• The modal share of the IR in India's freight business has

dras7cally decreased to approximately 27%, a significant decline from the
over 80% share it had at the 7me of India's independence.

§ Ar?ficial Division of Cargo:

o The ar?ficial division of cargo into goods and parcels is hindering efficiency. These
divisions, driven by tariff rules, handling procedures, and monitoring prac7ces, do
not align with the concerns of shippers.

• It is essen?al for the IR to abandon this ar?ficial divide and categorize

cargo based on its characteris?cs as either bulk or non-bulk, which could be
referred to as value-added.

§ Challenges in Compe?ng with Road Transport:

o The Indian Railways also faces compe77on from road transport, which has been
growing at a faster rate than rail transport. This compe77on, combined with the
fluctua?ng Net Tonne Kilometres (NTKM), has made it challenging for the IR to
maintain and expand its share in freight transporta7on, where overhaul in railway
transporta7on is required.

§ Inadequacy of Containeriza?on:

o Aqer 15 years of priva7za7on, containerized domes7c cargo accounts for only 1% of

IR's loading and 0.3% of the country's total freight.

• High haulage rates and the risk of market development with poten7al losses
are contribu7ng to this underperformance.

What are the Ways to Ease and Improve the Transport of Cargo by Indian Railways?

§ Need to Phase Out Parcel Trains:

 o The IR is facing challenges in moving general cargo using parcel trains and special
heavy parcel van (VPH) trains.

• One of the key reasons for these challenges is the high tariff, which is oqen
higher than truck rates.

o The VPH parcel trains are found to be counterproduc7ve, and there is a bemer
alterna?ve in the form of covered wagons that can carry more cargo efficiently.

§ Need of Flexibility for Shippers:

o A significant issue for the IR is that shippers can only send a few tonnes under
parcel tariff or thousands of tonnes under freight tariff, making it unsuitable for
the needs of general cargo.

• Shippers require a more flexible and suitable op7on that aligns with their
cargo sizes, akin to asking passengers to come with a load of
passengers before booking a berth on a passenger train.

§ Overcoming Challenges in Cargo Transporta?on:

o The declining share of the IR in bulk cargo is partly due to the high cost and capital-
intensive nature of railway sidings, which discourages smaller industries from using
them.

• To address this, common-user facili?es at cargo aggrega?on and dispersal

points are needed, especially in mining clusters, industrial areas, and large
ci7es.

§ Ensuring a Level Playing Field Between Rail and Road Transporta?on:

o Environmental clearance for rail loading/unloading facili7es has been made

mandatory but the same has not been imposed on road loading/unloading facili7es.
There is a need for consistent Environmental regula7ons.

§ Op?miza?on of Tarrifs:

o To incen7vize volumetric loading, tariff structures can be adjusted based on the

quan7ty loaded. The IR should also encourage cargo aggregators and op?mize
payload and speed for beTer efficiency in the long run.

§ Moderniza?on of Infrastructure:

o Urgent need for infrastructure moderniza7on in railways, including high-speed rail,

sta?on redevelopment, track doubling, coach refurbishing, GPS tracking, and
digitaliza7on for safety, efficiency, and cost reduc7on.

§ Reduc?on in opera?onal costs:

o Indian Railways has achieved an Opera7ng Ra7o of 98.14% which can be further
improved by focusing on energy conserva?on, op?mizing manpower, and
enhancing procurement prac?ces.

What are the Different Ini7a7ves of Railways for Increasing Bulk Cargo?
§ The Indian Railways (IR) has undertaken several ini7a7ves in the bulk cargo sector, including
relaxing block rake movement rules, allowing mini rakes, and introducing private freight
terminals (PFTs).

§ The Ga? Shak? Terminal (GCT) policy simplifies the opera7on of these terminals, and private
sidings are being converted into GCTs.

§ Government of India has introduced two key policies: The PM Ga?Shak? (PMGS) policy,
aimed at crea7ng a seamless mul7-modal transport network, and the Na?onal Logis?cs
Policy (NLP), focusing on building a na7onal logis7cs portal and integra7ng plaoorms across
various ministries

§ Investment in railway infrastructure: The government has also introduced schemes such
as ‘Sagarmala’ and ‘Bharatmala’ for port-led development and road development
respec7vely which must be integrated with Indian Railways.

§ Dedicated Freight Corridors: The government has also introduced schemes such
as ‘Dedicated Freight Corridors’ which should be leveraged to increase freight
transporta7on.
Core Demand of the Ques?on

• Highlight how Indian Railways has played a pivotal role in fostering na7onal integra7on and economic progress

• Examine the recent reforms and infrastructure developments to enhance logis7cs efficiency in Indian Railways

• Analyze the challenges faced by Indian Railways in enhancing its logis7cs efficiency, in light of recent reforms and
infrastructure developments

• Discuss the significance of the ‘3S Strategy’ (Share, Speed, and Service cost) in making Indian Railways globally
compe77ve.

Answer

The Indian railway system is regarded as the founda?on and lifeblood of the economy, carrying over
1.5 billion tonnes of freight annually. Recent reforms, including dedicated freight corridors and
Vande Bharat trains, aim to modernize logis7cs. However, addressing various challenges is essen7al
to strengthening its role in global trade and supply chain networks.

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Role in Fostering Na?onal Integra?on and Economic Progress

• Enhancing Regional Connec?vity: Indian Railways bridges geographical divides by

connec7ng remote and urban regions, fostering cultural exchange and economic
interdependence. This integra7on strengthens na7onal unity and regional development.
For example: The Jammu Division project enables seamless rail connec7vity to Kashmir aqer
six decades, boos7ng economic opportuni7es and tourism in the region.

• Driving Economic Growth Through Trade Facilita?on: By efficiently transpor7ng goods and
raw materials, Indian Railways serves as the backbone of India’s industrial and agricultural
supply chains, reducing transporta7on costs and increasing produc7vity.
For example: The South Coast Railway Zone is expected to enhance trade, agriculture, and
tourism in Andhra Pradesh and surrounding areas by improving freight movement.

• Providing Affordable and Accessible Transport: As a cost-effec7ve mode of travel, Indian

Railways ensures mobility for millions of passengers daily, promo7ng social inclusion and
access to educa7on, employment, and healthcare.
For example: The Vande Bharat trains, with improved speed and comfort, make travel more
efficient, benefi7ng students, professionals, and medical pa7ents across ci7es.

• Reducing Carbon Footprint and Promo?ng Sustainable Development: The electrifica7on of

railway tracks and investment in green technologies reduce dependence on fossil fuels,
aligning with India’s sustainability goals while improving opera7onal efficiency.
For example: Track electrifica?on ini?a?ves and solar-powered sta7ons significantly cut
emissions and promote the adop7on of renewable energy in railway opera7ons.

• Disaster Relief and Crisis Response: Indian Railways plays a crucial role in disaster relief by
swiqly transpor7ng essen7al supplies, rescue personnel, and medical aid during
emergencies.
For example: During the COVID-19 pandemic, Indian Railways converted coaches into
isola7on wards and ran special ‘Shramik’ trains for stranded migrant workers.

Recent Reforms and Infrastructure Developments to Enhance Logis?cs Efficiency

 • Crea?on of New Divisions and Railway Zones: Structural reforms, such as forming new
railway divisions and zones, enhance administra7ve efficiency and regional economic
development by op7mizing rail opera7ons.
For example: The crea?on of the Jammu Division and South Coast Railway Zone has
improved localized decision-making and freight capacity.

• Investment in Freight and Terminal Infrastructure: Expanding freight corridors and

modernizing terminals ensures faster cargo movement, reducing conges7on and boos7ng
logis7cal efficiency.
For example: The Dedicated Freight Corridors (DFC) project enhances goods transporta7on
speed, improving the reliability of freight services.

• Technology-Driven Safety and Opera?onal Enhancements: Implemen7ng modern safety

systems like KAVACH and digital logis7cs plaoorms enhances railway efficiency, preven7ng
accidents and delays.
For example: The KAVACH system, a safety mechanism for avoiding collisions, has been
deployed to improve rail safety standards.

• Financial Reforms and Cost Op?miza?on: Policies aimed at reducing cross-subsidiza7on in

freight charges ensure compe77ve pricing, aTrac7ng more industries to use rail transport.
For example: The Rashtriya Rail Sanraksha Kosh (RRSK), with an alloca7on of Rs 1 lakh
crore, focuses on railway infrastructure upgrades and safety improvements.

• Electrifica?on and Speed Enhancements: Increasing the average speed of passenger and
freight trains by upgrading tracks and expanding electrifica7on boosts opera7onal efficiency
and compe77veness.
For example: Superfast trains like Vande Bharat and Tejas Express have improved travel
7me, making rail transport a preferred op7on over air and road travel.

Challenges Faced by Indian Railways in Enhancing its Logis?cs Efficiency

• High Logis?cs Costs: Indian Railways’ logis7cs costs range between 14-18% of GDP,
significantly higher than the global benchmark of 8%. This increases the cost burden on
businesses and reduces compe77veness.
For example: India ranks 38th in the World Bank’s Logis7cs Performance Index (2023),
showing progress but s7ll facing a $300 billion compe??ve gap in global trade efficiency.

• Low Freight Train Speed: The average freight train speed is only 25 km/hr, oqen reduced
to 13-15 km/hr due to terminal conges7on, outdated infrastructure, and opera7onal
inefficiencies.
For example: Despite dedicated freight corridors (DFC) improving efficiency, many non-DFC
routes s7ll face slow movement due to priori?za?on of passenger trains over freight.

• Cross-Subsidiza?on Burden: Freight opera7ons bear a high cross-subsidiza?on cost to

compensate for passenger fare subsidies, making rail freight less compe??ve than road
transport.
For example: The freight charges on Indian Railways are higher than road transport due to
the need to offset losses from low passenger fares.

• Capacity Constraints at Terminals: Limited terminal capacity and inefficient handling cause
long wai7ng 7mes and deten?ons, reducing overall transport efficiency.
 For example: The Kisan Rail ini7a7ve to transport perishable goods faces delays due to lack
of cold storage facili?es at key railway terminals.

• Last-Mile Connec?vity Issues: The lack of integrated mul?modal transport solu?ons affects
seamless cargo movement from rail to road or ports, leading to higher turnaround ?mes.
For example: The Sagarmala Project aims to integrate railways with major ports, but
inadequate infrastructure at certain ports slows cargo movement.

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Significance of the ‘3S Strategy’ (Share, Speed, and Service Cost) in Making Indian Railways
Globally Compe??ve

• Enhancing Freight Train Speed: Increasing freight speed by 7-10 km/hr through beTer track
infrastructure and automa?on will improve efficiency and reduce turnaround 7me.
For example: The Bibek Debroy Commimee (2015) recommended separa7ng passenger and
freight opera7ons to enhance efficiency and increase freight train speeds. In line with this,
Vande Bharat freight trains have been introduced, aiming to double the speed of
conven7onal goods trains.

• Increasing Share in Freight Transport: Raising the rail share from 27% to 45% will reduce
dependency on road transport, lower emissions, and enhance efficiency.
For example: The Dedicated Freight Corridors (DFC) project has doubled rail’s share on
certain routes, reducing transporta7on costs for bulk commodi7es like coal and cement.

• Reducing Service Charges: Lowering logis7cs costs from 14-18% to under 10% of GDP will
make Indian exports more compe77ve and enhance industrial growth.
For example: The Economic Survey 2022-23 highlighted that reducing cross-subsidiza?on of
passenger fares by freight revenue could make Indian Railways more cost-compe77ve.

• Improving Terminal Infrastructure: Expanding freight terminal capaci?es and

modernizing handling mechanisms will minimize delays and increase efficiency.
For example: The Ga? Shak? Mul?-Modal Cargo Terminal project is developing 100 freight
terminals to improve cargo movement.

• Adop?ng Digital and Safety Technologies: Implemen7ng AI-driven logis?cs tracking,

KAVACH safety systems, and automated freight scheduling will enhance railway efficiency
and global compe77veness.
For example: The Rashtriya Rail Sanraksha Kosh has also been instrumental in improving
safety and reducing delays.

• Policy Reforms and Infrastructure Expansion: Implemen7ng recommenda7ons from railway

commiTees like Rakesh Mohan Commimee (2001) and Na?onal Transport Development
Policy Commimee (NTDPC, 2014) is crucial for sustainable logis7cs expansion.
For example: The Ga? Shak? Vishwavidyalaya aims to provide skilled manpower for logis7cs
management, enhancing the railway sector’s opera7onal capacity.

Enhancing Indian Railways’ logis7cs efficiency requires a focus on technological

upgrades, streamlined opera?ons, and improved infrastructure. Future efforts should
priori7ze public-private collabora?ons, digitaliza?on, and investment in high-speed freight
corridors. These measures will boost compe??veness, reduce costs, and posi7on Indian Railways as
a key player in global logis7cs.