Group 8: Dharshika, Rithika R, Shruthi Muruganandam, Jacob Philip Daniel, Kingsely Rajkumar

Indian Economy- Policy and Performance

Indian Railways

INTRODUCTION

ORIGIN

The Indian Railways, one of the largest railway networks in the world, has a rich history that
dates back to the 19th century. The origin of Indian Railways can be traced to the British colonial
era, when the need for an efficient transportation system became evident for economic and
administrative purposes.

EARLY DEVELOPMENT:

The idea of introducing railways in India was first proposed in the 1830s. Lord Dalhousie, the
Governor-General of India, played a pivotal role in advocating for the establishment of railways
to facilitate trade and administrative control. The first railway line in India was laid between
Bombay (present-day Mumbai) and Thane in 1853, covering a distance of 34 kilometres. The
inaugural journey marked the beginning of a transformative era in Indian transportation.

BRITISH COLONIAL INFLUENCE:

The British colonial rulers perceived railways as a means to consolidate their hold over the vast
and diverse Indian subcontinent. Railways were not only instrumental in transporting goods and
people but also played a strategic role in aiding quick mobilization of troops during times of
unrest. The network expanded rapidly during the latter half of the 19th century, connecting major
cities and serving as a vital tool for British economic interests.

EXPANSION AND TECHNOLOGICAL ADVANCEMENTS:

The late 19th and early 20th centuries witnessed significant expansion of the Indian Railways
network. Major trunk routes were laid, connecting regions across the country. The construction
of the Konkan Railway, a challenging engineering feat, further exemplified India's commitment
to modernizing its rail infrastructure.
Technological advancements also played a crucial role during this period. The introduction of
broad gauge and the adoption of modern signalling systems enhanced the efficiency and safety
of rail travel. The electrification of certain railway lines further improved the sustainability of the
network.

INDEPENDENCE AND POST-INDEPENDENCE ERA:

The year 1947 marked a turning point in India's history as it gained independence from British
rule. Post-independence, the Indian Railways underwent significant changes to meet the
demands of a growing nation. The period saw a surge in investment, modernization, and
expansion projects. The introduction of new technologies, such as computerized reservation
systems and modern rolling stock, brought about a paradigm shift in railway operations.

CHALLENGES AND REFORMS:

Despite its vast network, the Indian Railways faced challenges such as outdated infrastructure,
operational inefficiencies, and financial constraints. In the 21st century, the government initiated
reforms aimed at revitalizing the railways. Projects like the Dedicated Freight Corridors aimed to
enhance freight movement, while high-speed rail projects signalled India's intent to embrace
cutting-edge transportation technologies.

INDIAN RAILWAYS DURING THE BRITISH PERIOD

The construction of the Indian railways during the British colonial era involved systematic
exploitation and abuse of the labour force. The British sought to establish an extensive railway
network primarily to serve their economic interests, connecting resource-rich regions with ports
for efficient transportation.

The workforce for this ambitious railway project was largely drawn from the local Indian
population, and these labourers endured deplorable working conditions. Long working hours,
often exceeding 12 hours a day, were the norm. Physical labour was demanding, with workers
engaged in tasks such as laying tracks, digging tunnels, and constructing bridges. Safety
measures were rudimentary, leading to frequent accidents and injuries.

Wages were extremely low, and many labourers lived in squalid conditions with overcrowded
and unsanitary living quarters. Discrimination based on caste and ethnicity further exacerbated
the hardships faced by the workers. The British overseers, who were often insensitive to the
needs and concerns of the labourers, sometimes resorted to physical abuse to maintain control.

The construction of railways also disrupted local communities and agriculture. Displacement of
people from their ancestral lands and the destruction of traditional livelihoods further fuelled
discontent. The social and economic upheaval resulting from the railway construction laid the
foundation for widespread protests and resistance against British exploitation.

Despite the harsh conditions, the labourers played a crucial role in the successful completion of
the railway projects. Over time, however, these experiences contributed to the emergence of
labour movements and political activism in India. The exploitation faced by railway workers
became a focal point for early advocacy of workers’ rights, fostering a sense of solidarity and
paving the way for future struggles against colonial oppression.

BUDGET OF THE RAILWAYS

In 1921, British railway economist, William Mitchell Acworth was appointed chairman of the
Committee on Indian Railways. The report of the committee, known as the “Acworth Report”,
led to reorganization of Indian Railways; thus separating the railway finances of India from the
general government finances. In short, this led to creation of a separate Railway Budget, an
arrangement which continues in independent India today.

The railway finances were separated from the general government finances In 1924. After that in
1924 the budget was announced, a practice that continued till 2016. John Matthai presented the
first Railway Budget for independent India on 20 November 1947 which was interim Railway
Budget and The last Railway Budget was presented on 25 February 2016 by Mr. Suresh Prabhu..
The Interim budget 2024-25 has allocated Rs 2.55 lakh crore to the Indian Railways during fiscal
2024-25. In her sixth budget speech, Finance Minister Nirmala Sitharaman raised the Railway
budget by 5.8% over budgetary estimate (BE) levels of Rs 2.41 lakh crore for fiscal 2023-24

Highlights of the railway budget

• Three major railway economic corridors : Energy, mineral and cement corridor Port
connectivity corridors High traffic density corridors , according to the Finance minister, have
been identified under the PM Gati Shakti initiative for multi-modal connectivity.
• 40,000 normal bogies are aimed to be converted to standard Vande Bharat bogies.
• In order to fund long-term infrastructure projects like freight lanes and faster trains, as well
as to modernize the fleet with newer trains, carriages, and locos, the railway ministry had
requested an increase in its budgeted capital expenditures.
• Indian Railways spent a record capital expenditure (Capex) from April 1, 2023 to December
31, 2023- marking the highest-ever Capex utilization in nine months, according to a
statement by the Ministry of Railways.
• The data showed that 75% of the allocated Capex budget has been used by Indian Railways
in the first nine months of the fiscal year.
• The total expenditure incurred by Indian Railways during this period amounts to
₹1,95,929.97 crores, which represents approximately 75% of the overall Capex budget of
₹2.62 lakh crores.

Apart from that, Sleeper version of Vande Bharat Express will be in service very soon. In coming
years, the Railway Ministry is planning to provide the passengers better travelling facilities just
like Vande Bharat Express. This entire process is expected to cost a total Rs. 15,200 crores.

Government is planning to make good quality toilets in trains and also on railway stations.
Installation of CCTV cameras, GPS, Charging points, automatic water measurement system for
filling up the tanks, presence of charging points etc. These services on trains will be installed
shortly.

The National High Speed Rail Corridor Limited has attracted the maximum chunk of allocation,
up from total Rs.19,592 crores to Rs. 25,000 crores. According to the Railway Ministry, the
implementation of this project will surely reduce the travel time between Mumbai and
Ahmedabad from 5 to 6 hours to 3 hours.
The Government had also focused on enhancing the Metro Network in India as well in the
Railway Budget 2024. It is said that the metro network in India carries a total of 1 crore people
on a daily basis. Hence, the Government had taken the decision to expand the metro lines in
different cities. It is expected that India is going to have the world’s second-largest metro
network soon.

INDIAN RAILWAY POLICIES

Lord Dalhousie was introduced the policies in Indian railways in 1848.Generate capacity ahead
of demand by 2030, which will cater to growth in demand until 2050. Increase the modal share
of Railways from the current 27% to 45% in freight by 2030 as part of a national commitment to
reduce carbon emission and sustain it.

Policies of Indian railway system:

• Introduction of Passenger Railways and Expansion (1853-1924).

• Electrification and Expansion (1925 - 1950).
• Re-Organization of Zones and Developments (1951-1983)

Introduction of Passenger Railways and Expansion. (1853-1924)

The history of Indian Railways dates back to over 160 years ago. On 16th April 1853, the first
passenger train ran between Bori Bunder (Bombay) and Thane, a distance of 34 km.
It was operated by three locomotives, named Sahib, Sultan and Sindh, and had thirteen carriages.

Railways were developed to move finished goods physically from Britain to different interior
parts of colonial India. Britishers wanted to widen the size of the market for their goods. Roads
were developed to mobilize the British Army within India.

Electrification and Expansion.(1925 – 1950)

On 3 February 1925, the first electric passenger train in India began between Victoria Terminus
and Kurla Harbour. Delhi junction became the First Station in the North in 1864.

Electrification will provide energy efficient, eco-friendly mode of transport and also improve
system throughput by modernization of the railway system.
Mission Electrification will result into seamless (end to end) train operation on electric traction

Re-Organisation of Zones and Developments.(1951-1983)

As we entered the phase after Independence of India, the Railways faced drastic variations at
organizational level. Railways were diversified at the Zonal Level i.e.. Indian Railways was
classified into various Zones. A total of six zones were created with fixed fare according to the
class of the ticket purchased.
.
In December 1950, the Central Advisory Committee for Railways approved the plan for re-
organizing Indian Railways into six regional zones which were divided subsequently to create
newer zones. As of 2024, there are 17 operational zones of Indian Railways

CURRENT SITUATION AND DEVELOPMENT

The Indian railway system is regarded as the foundation and lifeblood of the economy. Indian
railways span thousands of kilometres practically covering the entire nation, making it the fourth
largest in the world after the US, China, and Russia. Due to its low cost and effective operations,
railways continue to be the most popular means of transportation for most Indians when
travelling long distances.

India has the fourth largest railway network with a daily passenger count of 24 million
passengers. Indian Railways is developing and creating technology in various areas such as
signalling and telecommunication.

Before the computer age, reservations were made manually by entering the details of the
passengers. This technique had a major drawback that the passengers had to wait in long queues.

In 1986, the first-ever computerized reservation system was introduced in New Delhi by Indian
Railways.
One major development is the launch of the “Vande Bharat Express“, India’s first semi-high
speed train. In its test runs, this is the only indigenous train built under the Make in India
initiative to travel 180 km per hour. However, due to speed restrictions, it cannot exceed the
maximum speed limits of the route tracks. It goes at 130 km/hour. It features several modern
amenities such as on-board Wi-Fi, GPS-based passenger information system, and CCTV
cameras.

As a part of the Railways’ plans to upgrade its network, the Ministry announced that all non-AC
sleeper coaches will be replaced by AC coaches for trains running for more than 130 kmph. This
move has been taken as a technical necessity for high-speed trains with the bonus of improving
the passenger experience.

Indian Railways will develop new products and efficient logistics services for small farmers, and
small and medium enterprises. It will also take steps towards integration of postal and railway
networks to provide seamless solutions for movement of parcels.

‘One Station-One Product’ concept will be popularized to help local businesses and supply
chains. It is an initiative which provides uniquely designed sale outlets to sell indigenous
products.

Trains are relatively fuel-efficient compared to road transport. This leads to lower carbon
emissions and reduced environmental impact.

Indian Railways maintains a strong focus on safety measures. It implements strict protocols and
infrastructure upgrades to prevent accidents.

The railway sector offers significant employment opportunities. It provides employment for a
wide range of skilled and unskilled workers.

Indian railways contribute to the overall economic growth of the country. It enables trade,
commerce, and tourism through efficient transportation and connectivity.

The railways have a rich history and heritage. It attracts tourists who can explore the diverse
landscapes and heritage of India by train