The two big announce-ments that companies will keep a close eye on in today’s Railway Budget will be freight rates and the money to be spent on the two dedicated freight corridors that will run from New Delhi to Mumbai and Kolkata. The railways have lost market share to road transporters over the past decade, especially since the quality of national highways started improving after 2000. Part of the problem was that the railways did not have enough money to invest because of high spending on salaries and pensions.
But the railway finances have improved. Market share is up because of steady freight rates. The freight corridors could help move some of the goods that are moving along roads back on track.
It is time to think beyond rail versus road. Booming India needs an integrated logistics plan, covering roads, rail, ports and air. Our entire logistics network needs to be upgraded fast. The rail budget should be a step in that direction.