By 2030, the National Rail Plan of the government hopes to raise the percentage of freight traffic that travels by rail from 27% to 45%.
The railway minister stated that in order for India to become a globally competitive economy, Indian Railways’ modal share in goods needed to double to 55%. “Overall, we ought to attain a 55% rail and 45% road share,” Ashwini Vaishnaw stated in a special interview with NDTV Profit. “If we accomplish this, the cost of logistics will drop to anywhere from 7.5-8.0% of GDP.” The National Logistics Policy was released by the government in 2022 with the goal of bringing the nation’s logistics expenses down from 13–14% of GDP to single digits.
For bulky, high-density cargo like coal, cement, and steel, Vaishnaw suggested that 80–85% of the cargo should be transported via railroads. The ratio of road to rail for packages should be 50–50.
The minister indicated that the administration is “working hard to achieve this target” but did not provide a timeframe. Nonetheless, by 2030, the National Rail Plan of the government hopes to raise the proportion of freight transportation via rail from 27% to 45%. To achieve that goal, actions like creating dedicated freight lanes, expanding network capacity, and modernising infrastructure are being taken. The dedicated freight lanes are almost finished, and in order to meet the growing demand, new tracks will be laid at a rate of 14 km per day, according to Vaishnaw.
With Rs 26,000 crore set up for new track construction, the national transporter installed 5,200 km of new track in FY23. Within the total budget of Rs 2.4 lakh crore for the railroads in FY24, that amount increased to Rs 31,850 crore. “We should maintain somewhere between Rs 2.4 and Rs 2.6 lakh crore,” Vaishnaw stated. “We believe this is an ideal level for the next few years because we have to simultaneously ramp up operational and safety standards.” According to the minister, the choice to invest should be based primarily on the financial benefits of meeting the growing demand for freight transportation via railroads.
If railroads were to handle even half of the freight demand generated in a developing nation such as India, the logistics industry as a whole could save at least Rs 1.25 lakh crore annually, he claimed. He also discussed how the network’s complexity limits the private sector’s ability to participate in the industry. He claimed that the public sector is the best place to handle this kind of complexity. Vaishnaw used the UK as an example, which had to reestablish government control over the railways following several efforts at privatisation. He declared, “It’s too complicated an entity; it’s too complicated a sector for private sector firms.” As a result of the interplay between several subsystems, assigning blame for network failures is challenging.