From UPSC perspective, the following things are important :
Prelims level : National Rail Plan in the Budget
Mains level : Paper 3- National Rail Plan
The Budget unveiled the National Rail Plan 2030.
Key provision in the Budget for railways
- First, there is a National Rail Plan (NRP) for 2030.
- Second, the Western dedicated freight corridor (DFC) and the Eastern DFC will be commissioned by June 2022.
- Parts of DFC will be in public-private partnership (PPP) mode.
- Third, there will be an East Coast corridor (Kharagpur to Vijaywada), an East-West corridor (Bhusaval to Kharagpur/Dankuni) and a North-South corridor (Itarsi to Vijayawada).
- Fourth, all broad-gauge routes will be electrified by December 2023.
- Fifth, there will be safety and passenger amenity measures.
National Rail Plan provisions
- The NRP is meant to increase the share of railways in freight, rectifying the pre-Independence and post-Independence bias
- It also aims to develop capacity that will cater to demand in 2050.
- It provides for mapping of the existing railway network on a GIS platform.
- The primary value addition of the NRP is an analysis of the existing network, with expected additions (such as the National Infrastructure Pipeline) also built in.
- NRP bases decision making on objective criteria.
Pricing and cross-subsidy issue
- In 2018-19, as per the NRP, India’s operating ratio (OR) was 0.59 for freight and 1.92 for passenger traffic.
- The problem is low passenger fares and artificially high freight rates required to cross-subsidise those.
- This is not the complete picture since normally, freight and passenger trains share common sections of track and passenger trains are given preference over goods trains in getting a path (route from point A to point B).
- Therefore, the average speed of a freight train is 24 km/hour — average speed is a surrogate indicator.
- A superior indicator is transit time — the time taken for a consignment to reach from one point to another.
Need for decreasing the cost and increasing the average speed
- Indian Railways has a system of HDN and HUN identification for the present network.
- HDNs are high-density routes.
- HUNs are highly-used networks with multiple origins and destinations and no clear single haul corridor.
- HUNs are primarily for passengers.
- For freight, HDNs are important.
- HDNs and HUNs carry 80 per cent of the traffic and there are sections where capacity utilisation is more than 100 per cent.
- With traffic increasing, capacity utilisation will worsen.
- If the intention is to increase rail share in the total freight carried to 44 per cent, the average speed must increase and costs must decline.
- With the Western and Eastern DFCs, both should happen.
Consider the question “What are the factors responsible for preventing the railways from realising its contribution in the development of the country. How far will the National Rail Plan help railways deal with these factors?”
The implementation of the NRP will help railways deal with the issues faced by it.
Back2Basics: Operating Ratio
- The operating ratio shows the efficiency of a company’s management by comparing the total operating expense of a company to net sales.
- An operating ratio that is decreasing is viewed as a positive sign, as it indicates that operating expenses are becoming an increasingly smaller percentage of net sales.
OR = (Operating Expenses + Cost of Goods Sold)/ Net sales