Rail budget and finances in Indian Railways

The Railway Budget deals with the induction and improvement of existing trains and routes, the modernisation and most importantly the tariff for freight and passenger travel. The Parliament discusses the policies and allocations proposed in the budget. The budget needs to be passed by a simple majority in the Lok Sabha (India's Lower House). The comments of the Rajya Sabha (Upper House) are non binding. Indian Railways are subject to the same audit control as other government revenue and expenditures. Based on the anticipated traffic and the projected tariff, the level of resources required for railway's capital and revenue expenditure is worked out. While the revenue expenditure is met entirely by railways itself, the shortfall in the capital (plan) expenditure is met partly from borrowings (raised by Indian Railway Finance Corporation) and the rest from Budgetory support from the Central Government. Indian Railways pays dividend to the Central Government for the capital invested by the Central Government.

Current Problems in Indian Railways

Indian railways suffers from deteriorating finances and lack the funds for future investment. Last year, India spent $28 billion, or 3.6% of GDP, on infrastructure. The main problem plaguing the Railways is the high accident rate which stands at about three hundred a year. Although accidents such as derailment and collisions are less common in recent times, many are run over by trains, especially in crowded areas. Indian Railways have accepted the fact that given the size of operations, eliminating accidents is an unrealistic goal, and at best they can only minimize the accident rate. Human error is the primary cause (83%) blamed for mishaps. The Konkan Railway route suffers from landslides in the monsoon season, which has caused fatal accidents in the recent past.

Contributing to the Railways' problems are the antiquated communication, safety and signaling equipment. One area of upgrading badly required is an automated signaling system to prevent crashes. A number of train accidents happened due to a manual system of signals between stations. However, the changeover to a new system would require a substantial investment. It is felt that this would be required given the gradual increase in train speeds and lengths, that would make accidents more dangerous. In the latest instances of signaling control by means of interlinked stations (e.g., Chennai - Washermanpet), failure-detection circuits are provided for each track circuit and signal circuit with notification to the signal control centres in case of problems. However, this is available in a very small subset of the total Railways.

Coal Transportation Agreement in Indian Railways

In a significant move at facilitating power generation in the country, Indian Railways have signed a Coal Transportation Agreement with M/s Nagarajuna Power Corporation Limited (NPCL) which is setting up a 1015 MW thermal power plant near Padubidri near Udipi in Karnataka on Konkan Railway.

The Agreement was signed among Southern Railway, Konkan Railway Corporation Limited and NPCL. Under the agreement, the coal required for the plant will be transported by rail from new Mangalore Port to the plant covering a distance of about 36 Kms.

Coal required for the power plant will be imported at the port. While loading of coal and a small lead of 5 kms is in Southern Railway, unloading siding will be in Konkan Railway jurisdiction. Transportation of 2.8 MTPA of coal will be required for the power house. The present agreement is on the lines of the agreement earlier signed with M/s Rosa Power Company Limited.

Technological Upgradation of Telecommunication Systems

A total of 29000 RKMs Optical Fibre Cable has been commissioned on Indian Railways. Work of upgradation of OFC network to high bandwidth STM-16 network is in full swing and has already been commissioned on all important routes.