Source – https://www.wionews.com/business-economy/budget-2024-what-to-expect-for-indias-railway-sector-685601
Publisher – Wion News
As the world’s fifth-largest economy waits for the interim budget scheduled to be presented on Thursday (Feb 1) by the Indian Finance Minister Nirmala Sitharaman, all eyes are on the infrastructure sector, particularly railways. Over the years, the current government has allocated thousands of crores to the development of the country’s railways, and this year is expected to be no different.
Railway Budget 2023-24
The Indian Railway Ministry was allocated a record $28.9 billion (Rs 2.4 lakh crore) in budgetary support for the financial year 2023-24. The minister said the amount was nine times what was allocated in the FY 2013-14.
Between April 1, 2023, and December 31, 2023 – in the first nine months of the fiscal year, the Indian Railways witnessed a record capital expenditure (capex) with 75 per cent of the total allocated capex budget spent, according to the official data.
This also includes a massive $22 billion (Rs 1.85 lakh crore) which had been allocated for capital expenditure in the current fiscal taking the total to $31.5 billion (Rs 2.62 lakh crore).
The 75 per cent of the total allocated funds spent amounts to a whopping $23.6 billion (Rs 1.95 lakh crore) which according to the government, was dedicated to infrastructural development and passenger safety of the Indian Railways.
The funds are also dedicated to crucial projects such as the development of new rail lines, the doubling of existing lines, gauge conversion, and the enhancement of passenger amenities, said the government.
The allocated funds were to be used to build new trains, and railway tracks as well as increase passenger facilities and ramp up the infrastructure to a world-class level.
In 2023, the Indian Railways witnessed dozens of new Vande Bharat trains, along new routes, as well as the redevelopment of railway stations.
What’s in store for Railways in Budget 2024?
The announcement on Thursday is only an interim one and it will provide an outline of what can be expected for the actual budget after the 2024 general elections when the new government takes over.
This will be Sitharaman’s sixth budget in a row as finance minister in Prime Minister Narendra Modi’s cabinet and comes ahead of crucial national elections where the incumbent PM will seek a third consecutive term in power.
Analysts, as per media reports, are optimistic that the upcoming budget will witness a surge in the capex spending on infrastructure, especially the railway sector.
It is also believed that the proposed India-Middle East-Europe economic corridor – an ambitious project to connect India, Saudi Arabia, the United Arab Emirates (UAE) and Europe – will not only give a major boost to the sector but also be a long-term growth driver.
Therefore, rail stocks are expected to keep up the momentum in 2024 as well.
