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Post Budget Analysis | Infrastructure: Railway

Post Budget Analysis | Infrastructure: Railway

<span style="font-weight: bold;">Proposals</span><br />
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<ul>
<li>Higher capital expenditure outlay for the railways (increased by 11.8 per cent from 2017v18 and 22.1 per cent from 2017v18) at Rs 1.46 lakh crore to support infrastructure projects. Of this, the budgetary allocation from the government stands at Rs 53,060 crore (up from&nbsp; Rs 40,000 crore in 2017v18, and marginally lower than 2017v18).</li>
<li>Increased expenditure on new line construction (up by 34.5 per cent), track renewals (up by 37.8 per cent), and electrification projects (up by 82.6 per cent) over the previous Budget to help upgrade railway infrastructure; execution of these to benefit construction companies.</li>
<li>Railway lines commissioning target increased to 4,100 route km in FY2019 from the target of 3,500 route km in FY2018 and 2,800 route km in FY2017; target for electrification projects increased from 4,000 route km in FY2018 to 6,000 route km in FY2019.</li></ul>
<ul>
<li>Redevelopment/modernisation of 600 railway stations is being undertaken.</li></ul>
<ul>
<li>Mumbai suburban rail network to be expanded and augmented by adding 90 km of double-line tracks (capex of Rs 11,000 crore) and 150 km of addition to the suburban network (capex of Rs 40,000 crore). Similarly, there are plans for suburban network of 160 km in Bengaluru (estimated capex of Rs 17,000 crore).</li></ul><br />
<span style="font-weight: bold;">Impact: Positive</span><br />
The capital and development expenditures of railways are projected to increase to Rs 146,000 crore in FY2019 from Rs 120,000 crore in FY2018 (Rs 131,000 crore in FY2018). The increase of 22 per cent in FY2018 is in line with expectations and will be required to meet the Railways Vision 2022. The Budget has also emphasised on setting higher execution targets with the commissioning of 4,100 km of railway lines in FY2019 compared to 3,500 km during FY2018 BE. The Budget continued to emphasise on electrification of railways by sharply increasing electrification projects capex (up by 82.6 per cent) and target (up by 50 per cent). In addition, the Budget also highlighted the redevelopment of 600 railways stations by Indian Railway Station Development Co. Other major announcements in the Budget include initiation of suburban rail network projects in Mumbai and Bengaluru with an estimated project cost of Rs 68,000 crore.<br />
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<span style="font-weight: bold;">Tilak Raj Seth, Executive Vice President, Mobility, Siemens</span><br />
The allocation for railways is Rs 8.4 lakh crore and this is 13 per cent more than last year, which is very good. There is enhanced reemphasis on the issue of electrification. The government has already stated that 4,000 km would be completed this year. The Finance Minister also spoke of the focus on safety and capacity addition in terms of implementation of train protection and warning system (TPWS), which is the need of the hour. Also, 160 km of suburban lines will be added. There is another proposal for doubling of 90 km of suburban lines in Mumbai. These will provide impetus to more and better urban services in areas where they are required. The announcements, therefore, are in the direction of industry expectations. Another key direction given by the Finance Minister on infrastructure projects is that they will be monitored at the highest level, which means that the addition and implementation of projects will be timely and efficient.<br />

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