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Chapter # 14. Railways


By 2022-23, India should have a rail network that is not only efficient, reliable and safe, but is also cost-effective and accessible, both with respect to the movement of people and goods. This requires achieving the following objectives:

  • Augment the capacity of existing railway infrastructure.
  • Increase the speed of infrastructure creation from the present 7 km/day to 19 km/day by 2022-23.1
  • Achieve “100 per cent”2 electrification of broad gauge track by 2022-23 from the 40 per cent level in 2016-17.
  • Increase the average speed of freight and mail/ express trains to 50 km/hr (from about 24 km/hr in 2016-17) and 80 km/hr (from about 60 km/ hr), respectively.3
  • Improve the safety of the railways, achieving zero fatalities from the 2016-17 level of 238 fatalities and reducing the number of accidents from the 73 recorded in 2017-18.4
  • Enhance service delivery, achieving 95 per cent on-time arrivals by 2022-23.5
  • By 2022-23, the railways should have a freight load of 1.9 billion tonnes and an improved modal share of 40 per cent of freight movement from the current level of 33 per cent.6
  • Increase the share of non-fare revenues in total revenue to 20 per cent.

Current Situation

The Indian Railways (IR) is the fourth largest network in the world in terms of route km (67,368 km in FY17).7 It is also the largest passenger (1,150 billion-passenger km in FY17)8 and fourth largest freight (620 billion net-tonne km in FY17)9 transporting railway system globally. In FY17, 13,32910 passenger trains carried over 22.24 million11 passengers daily, i.e., almost equivalent to Australia’s population, while the freight transported was 1.1 billion tonnes.12 During FY07-FY17, railways’ revenue increased at a CAGR of 5.7 per cent to USD 25.1 billion13 in FY17, led by strong demand, increasing urbanization and rising incomes.

Despite its extensive reach and the substantial growth in freight load, the modal share of railways in the transportation of surface freight has declined from 86.2 per cent in 1950-5114 to 33 per cent in 2015, in part due to a shortfall in carrying capacity and lack of price competitiveness.

IR’s golden quadrilateral and its diagonals make up only 15 per cent of the total route of the railways but it transports 52 per cent of passenger traffic and 58 per cent of total freight load.15 This highlights the high saturation and over-utilized capacity on popular routes.

Since passenger and freight traffic move on the same tracks in India, we have not been able to increase speed or capacity in a significant manner relative to global benchmarks.

The expenditure on the railways as a percentage of transport expenditure declined from 56 per cent in 1985-90 (7th plan) to 30 per cent in 2007-12 (11th plan).16 Despite its contribution to the overall economy, under-investment in the sector has crippled operations and hampered capacity augmentation.

From 1950-51 to 2013-14, the route km increased by only 23 per cent against the growth in freight and passenger km of 1,344 per cent and 1,642 per cent respectively.17

The government has recognized the need for additional investment in rail infrastructure and scaled up investment by almost three times, from INR 53,989 crore in 2013-14 to INR 1.47 lakh crore18 in 2018-19 (BE).


  1. Congested networks: Over-stretched infrastructure with 60 per cent plus routes being more than 100 per cent utilized, leading to a reduction in average speed of passenger and freight trains.
  2. Organizational structure: Delays in decision-making, inadequate market orientation and long project approval durations lead to slow turnover times and delays in the implementation of railways projects.
  3. Internal generation of resources: Negligible non-fare revenues and high freight tariffs have led to a sub-optimal freight share. The lower relative cost of transporting freight by road has led to a decline in the share of the railways. Low and static prices for the passenger segment have also contributed to low internal generation of resources.
  4. Safety and poor quality of service delivery: There have been a number of accidents and safety issues in the IR in recent years. Poor cleanliness of trains and stations, delays in train departures/arrivals, quality of food and difficulties in booking tickets are key issues.
  5. Efficiency of terminals: Poor terminal facilities lengthen loading and unloading times. Eighty per cent of railway loads come from terminals. The functioning of terminals needs to be strengthened to improve rail freight.
  6. Economies of scale: The lack of scale economies especially impact management quality and system accountability.

Way Forward

  1. Better utilization of existing infrastructure to address congestion:
  • Prioritize ongoing projects to improve capacity utilization. Timely completion of these projects will generate more revenue. At the same time, we need to maintain and upgrade the existing network to ensure that supply keeps up with demand.
  • Ensure that the dedicated freight corridors (DFCs) and the Mumbai-Ahmedabad High Speed Rail (MAHSR) are completed on schedule, particularly by timely completion of land acquisition for DFCs. DFCs should be fully commissioned by FY20; feeder routes to the DFCs should be developed simultaneously.
  1. Ease organizational rigidity through structural reforms:  
  • Consider opening up the ownership and operations of freight terminals and ownership of locomotives and rolling stock to the private sector under a transparent, neutral (non-railway) and fair regulatory mechanism. This will improve performance and attract private players and investments.
  • Consider transferring coach and locomotive manufacturing and repairs to private players. However, since human safety is involved in the case of coaches and wagons, IR should continue to have regulatory and technical control over their manufacture and maintenance to ensure the safety of users in compliance with the General Rules of IR.
  • Separate suburban passenger transport from the rest of the network and put a light rail network in place in all major urban areas under local governments.
  1. Rationalize fare structures and subsidies, and monetize assets to generate revenues:
  • Revisit IR’s pricing model to make the passenger and freight segments sustainable. Freight tariffs should be competitive with the cost of road transportation.
  • Expedite the process of establishing the Rail Development Authority (RDA), already approved by the government19. DA must advise/ make informed decisions on an integrated, transparent and dynamic pricing mechanism to determine rail fares and rebalance the passenger and freight categories to improve efficiency and rebalance the modal mix of goods transport.
  • Monetize land resources with the railways, particularly through developing non-railway revenues such as through retail or other activities.
  • Increase retail revenues from railway stations by investing in facilities, modernizing stations and contracting space to private players.
  1. Enhance safety of trains to reduce accidents and modernize stations:  
  • The government has created the Rashtriya Rail Sanraksha Kosh (RRSK) in 2017-18 to address critical safety related issues.
  • Eliminate level crossings and cattle crossings and fence railway tracks in areas with high levels of activity to prevent accidents.
  • Increase the use of proven, advanced technol-ogies such as automatic train protection, fog safety devices, end of train telemetry devices and on-board/online condition monitoring systems.
  • Implement the 22 recommendations of the High-Level Safety Review Committee chaired by Dr. Kakodkar.20
  • Upgrade and ensure the smooth functioning of by-pass crossings and grade separations.
  • Redevelop 100 out of 400 identified railway stations by 2022.
  • Award station-cleaning contracts to private vendors and sharply increase the number of bio-toilets by 2019.
  1. Enhance the ease of doing business:
  • Set up an independent homologation and standardization agency to adopt new railway technology and improve the speed and reliability of the railway network.
  • Switch to common transport documents with (i) an internationally accepted liability regime for domestic and international transportation and (ii) common carrier status to all rail-based service providers.
  • To enhance credibility, ensure that there are no interim changes in tariff and non-tariff rules.
  • Use technology to schedule and route freight busi-ness to improve asset productivity and utilization.
  • Complete by 2022-23 the commissioning of the remaining 55 of the 100 new freight terminals announced in the Rail Budget of 2016-17 under ‘Mission Hundred’.21
  • Improve terminal efficiency by promoting the concept of ‘engine-on-load’ system, developing proper terminal layouts, adopting efficient operational practices, operating trains end-to-end, and using proper handling methods/ systems for loading and unloading operations.22
  1. Set up an independent regulator for the Indian Railways:
  • The government has already approved the formation of the RDA, an independent regulator for IR in February, 2018. The regulator’s functions will include the following:23
  • Take decisions regarding price regulation and enhancement of non-fare revenue.
  • Protect consumer interests, promote competition, efficiency and economy and ensure a fair deal to stakeholders and customers.
  • Help attract investment, promote efficient resource allocation, benchmark service standards and enforce standards.
  • Put in place measures to absorb new technologies and develop human resources.
  • Provide a framework for non-discriminatory open access to the dedicated freight,corridors.


Chapter # 41. Data Led Governance and Policy Making

Objectives Evidence based policy making should be made integral to the overall governance structure in New India, 2022-23. To achieve this, timely gen

Chapter # 40. Optimizing the Use of Land Resources

Optimizing the Use of Land Resources-Ensuring that land markets function smoothly, through efficient allocation of land across uses, provision of secu

Chapter # 39. Modernizing City Governance For Urban Transformation

Objective  City Governance For Urban Transformation To transform our cities into economically vibrant and environmentally sustainable habitats that p

Chapter # 38. Civil Services Reforms

Objective  civil-services-reforms To put in place a reformed system of recruitment, training and performance evaluation of the civil service to ensur

Chapter # 37. Legal, Judicial and Police Reforms

Objective To ensure the safety and security of citizens and ensure access to effective legal systems and speedy delivery of justice. Current Situation

Chapter # 36. The North-East Region

Objectives The North-East Region (NER) should: Have adequate road, rail and air connectivity, waterways, internet connectivity and financial inclusion

Chapter # 35. Balanced Regional Development: Transforming Aspirational Districts

Objective  Balanced Regional Development: Transforming Aspirational Districts Achieve balanced development in India by uplifting 115 districts, curre

Chapter # 34. Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes (OBCs), Other Tribal Groups and Minorities

SCs, STs, OBCs, De-Notified Tribes (DNTs), Nomadic Tribes (NTs) and Semi-Nomadic Tribes (SNTs) Objective  To accelerate the socio-economic developm

Chapter # 33. Senior Citizens, Persons with Disability and Transgender Persons

SENIOR CITIZENS  Objective To ensure a life of dignity, social security and safety for senior citizens, enabling them to actively participate in econ

Chapter # 32. Gender

Objective  To create an enabling environment, sans institutional and structural barriers. To enhance the female labour force participation rate to at

Chapter # 31. Nutrition

Objectives  Under POSHAN Abhiyaan, achieve the following outcomes by 2022-23, compared to the baseline of 2015-16 (National Family Health Survey-4):

Chapter # 30. Universal Health Coverage

Objectives  On the strong platform of Pradhan Mantri – Jan Arogya Yojana (PM-JAY): Attain a coverage of at least 75 per cent of the population

Chapter # 29. Human Resources for Health

Objectives  Achieve a doctor-population ratio of at least 1:1400 (WHO norm 1:1000) and nurse-population ratio of at least 1:500 (WHO norm 1:400) by 2

Chapter # 28. Comprehensive Primary Health Care

Objectives  Under Ayushman Bharat, scale-up a new vision for comprehensive primary health care across the country, built on the platform of health an

Chapter # 27. Public Health Management and Action

Objectives  To revamp radically the public and preventive health system in the nation through the following strategic interventions: Mobilize public

Chapter # 26. Skill Development

Obejctives  For harnessing the demographic advantage that it enjoys, India needs to build the capacity and infrastructure for skilling/reskilling/up-

Chapter # 25. Teacher Education and Training

Objectives There cannot be a quality education system without quality teachers. Therefore, a thorough revamp of the entire ecosystem of teacher educat

Chapter # 24. Higher Education

Objectives  Increase the gross enrolment ratio (GER) in higher education from 25 per cent in 2016-17 to 35 per cent by 2022-23. Make higher education

23. School Education

Objectives Universal access and retention: o Hundred per cent enrolment and retention at elementary education and secondary education levels; achieve

Chapter # 22. Sustainable Environment

Objective  The objective is to maintain a clean, green and healthy environment with peoples’ participation to support higher and inclusive economic

Chapter # 21. Water Resources

Objectives By 2022-23, India’s water resources management strategy should facilitate water security to ensure adequate availability of water for l

Chapter # 20. Swash Bharat Mission

Objectives The key objectives of the Swachh Bharat Mission include: 1. Making India Open Defecation Free (ODF) by October 2, 2019. 2. Carrying out ext

Chapter # 19.Smart Cities for Urban Transformation

Objectives  Leverage the ‘Smart Cities’ concept in select urban clusters to: Drive job creation and economic growth. Significantly improve effici

Chapter # 18. Digital Connectivity

Objectives Given the relevance of digital connectivity to economic growth and the need to eliminate the digital divide by 2022-23, India should aim to

Chapter # 17. Logistics

Objectives Achieve multi-modal movement of cargo on par with global logistics standards. Reduce the logistics cost to less than 10 per cent of GDP fro

Chapter # 16.Ports, Shipping and Inland Waterways

Objectives  Double the share of freight transported by coastal shipping and inland waterways from 6 per cent in 2016-171 to 12 per cent by 2025. Incr

Chapter # 15. Civil Aviation

Objectives Enhance the affordability of flying to enable an increase in domestic ticket sales from 103.75 million in 2016-171 to 300 million by 2022.2

Chapter # 14. Railways

Objectives By 2022-23, India should have a rail network that is not only efficient, reliable and safe, but is also cost-effective and accessible, both

Chapter # 13. Surface Transport

Objectives Increasing the coverage and quality of roads and highways is critical to enhancing connectivity and internal and external trade. By 2022-23

Chapter # 12. Energy

Objectives The government’s on-going energy sector policies aim “to provide access to affordable, reliable, sustainable and modern energy”. At t

Chapter # 11. Minerals

Objectives Double the area explored from 10 per cent of obvious geological potential (OGP) area to 20 per cent.1 Accelerate the growth of the mining s

Chapter # 10. Travel, Tourism and Hospitality

Objectives  Increase India’s share in global international tourist arrivals from 1.18 per cent to 3 per cent. Increase the number of foreign touris

Chapter # 9. Housing For All

Objectives Provide every family with a pucca house, with a water connection, toilet facilities, and 24×7 electricity supply and access. Build 2.9

Chapter # 8. Financial Inclusion

Objectives Banking for the unbanked  o Bank accounts: Ensuring universal access to bank accounts, which are a gateway to all financial services.  o

Chapter # 7.Doubling Farmers’ Income (III): Value Chain & Rural Infrastructure

Objectives • Transform the rural economy through the creation of modern rural infrastructure and an integrated value chain system. • Leverage the

Chapter # 6.Doubling Farmers’ Income (II): Policy & Governance

Objectives Create a policy environment that enables income security for farmers, whilst maintaining India’s food security. Encourage the participati

Chapter # 5.Doubling Farmers’ Income (I): Modernizing Agriculture

Objectives • Modernize agricultural technology, increase productivity, efficiency and crop diversification. • Generate income and employment throu

Chapter # 4.Industry

Objectives Double the current growth rate of the manufac-turing sector by 2022. Promote in a planned manner the adoption of the latest technology adva

Chapter # 3. Technology and Innovation

Objectives India should be among the top 50 countries in the Global Innovation Index by 2022-23.1 Five of our scientific research institutions should

Chapter # 2.Employment and Labour Reforms

Objectives Complete codification of central labour laws into four codes by 2019. Increase female labour force participation to at least 30 per cent by

Chapter # 1 Growth (India @ 75)

Objectives Steadily accelerate the gross domestic product(GDP) growth rate to achieve a target of about 8 per cent during 2018-23 This will raise the


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