To grow India’s economy sustainably, the Indian government has prioritised the development and modernisation of its railways. With every investment in railways having a high multiplier impact on 250 industries, mass mobility is key to take a quantum leap towards a Viksit Bharat (developed nation).
The rail system has taken India places in more ways than one by facilitating economic and social development through geographic connectivity, citizen mobility, and commercial activity, as well as providing a world-class logistics and transportation infrastructure.
The Indian government recognises this crucial balance, and the Union budget has allocated a substantial ₹2.62 lakh crore to Indian Railways.
It is a clear signal of its intent for a modern, reliable, and more sustainable future.
Economic backbone
Despite being small, relative to the large population, India’s road sector contributes 14 per cent to the country’s energy-related carbon dioxide emissions — a proportion anticipated to rise as the vehicle fleet expands. This paradox clearly positions railways as a more sustainable mode of transport. Trains not only aid nations in achieving climate targets but also offer additional economic benefits such as job creation, increased trade, improved accessibility and connectivity, and urban spatial growth densification.
Redefining tracks
At the centre of the government’s vision is the National Rail Plan (NRP), which outlines several strategies to make Indian Railways future-ready. These include increasing the railways’ share in freight transportation, improving service delivery for both freight and passenger services, reducing transit time for freight, lowering the overall cost of rail transportation by nearly 30 per cent, and achieving net-zero carbon emissions by 2030.
Future focus
The railway sector clearly has the potential to steer towards a fast growing and sustainable economy. Industry reports estimate that India’s rail capacity augmentation through dedicated freight corridors, and improved rail connectivity, combined with heavy haul trains and multi-modal freight hubs, can help increase India’s rail freight share to 40 per cent by 2050.
This, in turn, has the potential to reduce the number of trucks plying on Indian roads by 7 million and achieve a staggering reduction of 4.3 gigatonnes in carbon dioxide emissions by 2050.
However, India requires substantial capital for its railways to complement the road infrastructure for both passenger and freight traffic. To achieve that, it is crucial to secure private and institutional capital for projects under construction. The government has commendably opened the door for private enterprises to expedite the completion of these projects.
Implementing a production-linked incentive scheme focused on key railway components could significantly benefit India. This would stimulate domestic manufacturing and further bolster the ‘Make in India’ initiative. Moreover, creating a policy environment that encourages private sector involvement and exports from India is crucial. This can be achieved through measures like streamlined taxation and fair contract terms.
Today’s investments in railways will enable the country to achieve its long-term goals, not just in terms of sustainability, but also in driving broader socio-economic growth — a step closer to Viksit Bharat@2047.
(The writer is Managing Director, Alstom India)