Railway Budget 2024: FM Sitharaman Allocates ?2.55 Lakh Crore For Railways' Capex, Unveils Three New Corridors
Finance Minister Nirmala Sitharaman unveiled the Union Budget for the fiscal year 2024-25 in Parliament today at 11 am, and during her Interim Budget speech in the lower house of Parliament, she announced an earmarked capital expenditure of ?2.55 lakh crore for the Indian Railways in the upcoming financial year.
This marks an increase from the previous fiscal year's allocation of ?2.4 lakh crore.
Railway Budget 2024: 3?new corridors announced
In her announcement, Minister Sitharaman introduced three new railway corridors: the Energy, Mineral, and Cement Corridor, the Port Connectivity Corridor, and the High Traffic Density Corridor.
These corridors have been identified under the PM Gati Shakti scheme for multimodal connectivity. They are expected to enhance efficiency and reduce costs.
"The resultantdecongestion of the high-traffic corridors will also help inimproving operations of passenger trains, resulting insafety and higher travel speed for passengers. Togetherwith dedicated freight corridors, these three economiccorridor programmes will accelerate our GDP growth andreduce logistic costs," FM Sitharamansaid.
Railway Budget 2024:?40,000 bogies to be converted to Vande Bharat standards
Furthermore, the Finance Minister disclosed plans to convert 40,000 bogies to Vande Bharat standards, aiming to improve safety and convenience for passengers.
During the 2024 World Economic Forum in Davos, the Railway Minister, Ashwini Vaishnaw, announced that significant progress had been made towards expanding and modernising the railways. However, the specific figure for railway capex is still pending.
He stated, "Last year we added 5,200 kms of new tracks. That's like adding the entire Swiss network in one year. We are now aiming at a pace of 15 kms of tracks a day." Minister Vaishnaw also noted that 77% of the ?2.4 lakh crore capex plan has been completed to date.
Regarding the Kavach technology, Vaishnaw mentioned significant international interest, stating, "People see that by participating in Kavach, they will get an opportunity in North America, Australia, South Africa, southeast Asian markets."
2.40 lakh crore capital outlay in?2023 railway budget?
In the preceding Union Budget for 2023-24, the ministry had earmarked a capital outlay of Rs 2.40 lakh crore for the Indian Railways.?
This allocation represented a historic high, nearly nine times the outlay observed in the Financial Year 2013-14. Notably, the annual capital expenditure for Railways was confined to Rs 45,980 crore until 2014.
Currently, Indian Railways is actively engaged in numerous projects nationwide, such as the Mumbai¨CAhmedabad high-speed rail corridor.?
Given the government's prioritization of infrastructure development, anticipations are high that capital expenditures will witness further augmentation in the upcoming years.
Surge in Rail stocks ahead of Interim Budget 2024
In anticipation of the Interim Budget 2024 on Thursday, railway stocks surged up to 5%, reflecting a widespread expectation of a 15-20% increase in capital expenditure (capex) allocation for the Indian Railways compared to the previous year. This sentiment prevailed despite the event being a vote on account.??
Several railway-related stocks witnessed positive movements. IRCON International shares rose by 3.26%, Texmaco Rail Engineering jumped by 2.71%, Indian Railway Finance Corporation climbed 2.58%, and Rail Vikas Nigam advanced by 1.52% on the BSE. Additionally, Jupiter Wagons saw a 1.46% increase, IRCTC rose by 0.88%, and Titagarh Rail Systems by 0.71%.??
Merger of Railway Budget with Union Budget
In 2016, the Indian government merged the Railway Budget with the Union Budget, ending a 92-year practice of presenting them separately.?
The first combined Budget was for the financial year 2017-18, presented by then Finance Minister Arun Jaitley.?
Prior to this, the Railway Budget was presented separately a few days ahead of the Union Budget. The decision to merge was based on recommendations from a committee headed by Bibek Debroy.?
The merger aimed to provide a holistic view of the government's financial position, exempt Indian Railways from dividend payments, wipe off its capital-at-charge and offer more flexibility to the Finance Ministry in resource allocation.?
The move also aimed to facilitate multimodal transport planning and streamline legislative work. The first Railway Budget was presented in 1924.??
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