Home / Budget 2019 / News /  Railways get a record 1.58 trillion in Union Budget 2019-20

NEW DELHI : The Union budget has allocated a record of 1.58 trillion outlay for Indian Railways for the upcoming financial year 2019-2020 to expand the railway infrastructure in the country.

In the interim-budget presented by the finance minister Piyush Goyal on Friday, he said “infrastructure is the backbone of any nation’s development and quality of life. Whether it is highways or railways or airways or even digi-ways, we have gone beyond incremental growth to attain transformative achievements." Presenting the figures, Goyal said the capital support from the budget for railways is proposed at 64,587 crore in 2019-20 (BE) and overall capital expenditure is of 1.58 trillion.

However, the minister also pointed out the dismay performance of the national carrier where the operating ratio has declined to 98.4% (2017-18) which means the railways has to spend 98.4 to earn 100. Although Goyal expressed hope of this to be reduced to 96.2% in 2018-19 (RE) and further to 95% in 2019-20 (BE).

A glance at Budget 2019-20 for Indian Railways shows a steep hike in staff expenses from 77,796 crore to 86740.86 crore showing the recruitment burden which national carrier has to bare on account of additional hiring of 1.5 lakh people. It seems the hike in GBS would be easily absorbed by the staff expenses leaving the national carrier with the same amount allocated last year for its expenditure.

However, the pension which was a major worry for railways would see an increase of just 2,700 crore. In addition there is a hike of around 2,000 crore on diesel expenditure for running locomotives.

During the NDA government under Narendra Modi, Indian Railways has witnessed a huge jump in capital expenditure from 0.96 trillion (2015-16) to 1.48 trillion (2018-19) and the budgetary support increase of one and half times from 35,008 crore to 64,587 crore. The increase in funds were supported by several reforms like complete electrification of railways making India world’s first nation to have its complete railways system on electricity, building up first high-speed train or Bullet Train between Ahmedabad and Mumbai, semi-high speed train named Vandey Bharat Express, cabinet clearance to form railway regulator, etc to name a few.

Vishwas Udgirkar, Partner, Deloitte India saysthe overall Railways budget suggests increase, the total capex estimates have increased much less by about 8%, indicating less growth as compared to previous year. In a nutshell, through this budget, the Finance Minister has reiterated government’s commitment to investment infrastructure- both physical and social infrastructure.

The budget does not specifically talk about allocations to each of the sectors, indicating no big-ticket increase in allocation, Vishwas points out.

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