Budget 2023: Why is Railway Budget 2023 keenly awaited

The Indian Railways, the lifeline of the Nation, had a separate budget till merged with the Union Budget since 2017. It remains the single largest mode of passenger and goods movement which is why everyone awaits Railway budget 2023-24. To know more, read ETV Bharat bureau report.

New Delhi: Indian Railways as a national transporter is the lifeline of India and this is the single biggest mode of passenger and goods movement in the country. That is why since the British period there was a separate Railway Budget which was merged in the Union Budget from 2017. Given its importance, the Centre allocates a considerable amount to the Ministry of Railways.

In 2022-23, the Railway Budget has been pegged at around Rs 4.8 lakh crores, which is over 12 per cent of the total budgeted expenditure which stood at around Rs 39.45 lakh crore for the current financial year.

The Railways traffic receipts, in other words its income from freight and passenger movement, have picked up sharply after the relaxation of Covid-19 lockdowns. As a result, the Railways traffic receipts are expected to jump from a low of just Rs 1.4 lakh crore (actual) in 2020-21 to nearly Rs 2.4 lakh crore in the current financial year, a jump of over 71% in two years.

Breaking down Railway Budget

In addition to the budgetary support from the Government of India, the Railways has three main sources of its income. These are receipts from freight movement, passenger fare, and other coaching receipts and other sundry earnings. The income from freight movement forms the biggest chunk of a total receipt of Rs 2.4 lakh crore as, in the current financial year, the Railways is expected to earn Rs 1.65 lakh crore from transportation of goods, which is more than two-third of the total income of the railways for the year.

Freight income is followed by the income from passenger fare which has been estimated at Rs 58,500 crores in the current financial year, which is less than one-fourth of the total income of Indian Railways this year. In addition to Freight and Passenger Fare, the Railways is expected to earn some Rs 16,000 crore from coaching receipts and other sundry earnings.

Budgetary Support

As Rs 2.4 lakh crore that the Railways is expected to earn from passenger and freight movement this year is not enough to meet its revenue and capital expenditure requirement, the Government of India provides an additional Rs 1.37 lakh crore from the General Budget as a capital support, taking the total receipts to Rs 3.77 lakh crores.

In addition to its own receipts and capital support from Government of India, the Railways would also arrange over Rs 1 lakh crore from extra-budgetary resources, taking the total railway budget to Rs 4.8 lakh crores.

Breaking down Railways expenditure

Indian Railways revenue and capital expenditure are at almost the same level. Railways’ revenue expenditure for the current financial year has been estimated at over Rs 2.34 lakh crores. The capital expenditure that the Railways spends for infrastructure such as laying new railway lines, gauge conversion, doubling, electrification and procurement of engines and rolling stock, has been estimated at Rs 2.46 lakh crores.

It gives the Railways an operating ratio of 97% which in other words means that the Indian Railways would spend 97 paise for every one rupee that it earns.