The modernisation and development of railways is imperative for growth of India. However, railways has been lately facing crunch of funds for capital expenditure, which shows its weak financial position. Comment and suggest ways for better resource generation and utilisation.

The Indian railway is the lifeline of country and the most important means of mass transportation. However, it has been facing shortage of funds for modernization and development, for which it has turned to private investors and other credit sources. Borrowings for capital expenditure in railways, is a sign of weak financial position.

Reasons for weak financial position:

  • Large scale evasion of ticketing by passengers.
  • High operating costs (power, diesel).
  • Large number of non-essential assets (stadiums, large colonies, etc).
  • Low and unrevised freight rates.
  • Old age of rakes – low energy efficiency.
  • Slow adoption of modern, more efficient technology.

Ways to achieve better resource generation and regulation:

  • Monetisation of existing railway properties (hotels over stations, shopping complexes).
  • Adoption of energy efficient rolling stock.
  • Prioritised electrification of all tracks – save diesel costs.
  • Revision of freight rates.
  • Strict measures to prevent ticketless travel.

Railways is known as the ‘life-blood’ of the nation. It’s sound financial health and efficient operation is essential for smooth functioning of the economic engine in India.


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