Indian budget 2022

INDIA: The construction of 400 Vande Bharat inter-city trainsets over the next three years and the installation of short-range radio-based anti-collision devices on 2 000 route-km of Indian Railways are highlights of the 2022-23 national budget presented to parliament by Finance Minister Nirmala Sitharaman on February 1.

Thanks to a significant increase in government support for IR, the railway’s capital expenditure between April 1 2022 and March 31 2023 is expected to total Rs1 403·7bn, up from a latest estimate of Rs1 200·6bn in 2021-22.

Explaining her rationale for a 35·4% hike in overall capital expenditure from Rs5·5tr in 2021-22 to Rs7·5tr in 2022-23, Sitharaman emphasised the need to reboot the national economy after prolonged disruption to the ‘social ecosystem’ as a result of the Covid-19 pandemic. ‘This budget seeks to lay the foundation and give a blueprint to steer the economy’, she said. ‘Capital investment holds the key to speedy and sustained economic revival and consolidation through its multiplier effect.’

IR’s increased allocation includes extra funding for new line construction, at Rs252·4bn against Rs183·5bn in 2021-22, and a doubling of support for multiple-tracking works from Rs63bn to Rs121bn. Leased assets to be procured by the IR Finance Co will increase from Rs147bn to Rs221·9bn, while Rs120bn had been allocated for the national rail safety fund. By contrast, the allocation for rolling stock procurement is cut from Rs111·8bn to Rs79·8bn.

Funding for the Dedicated Freight Corridors will fall from Rs212bn to Rs157·1bn as the first two major projects near completion, but the allocation for the National High Speed Corp will rise from Rs169·8bn to Rs241bn.

In terms of its operating budget, IR’s revenue for 2022-23 is estimated at Rs1 570bn from freight and Rs585bn from passenger, up from a latest estimate of Rs1 426bn and Rs444bn for 2021-22. However, staff costs continue to rise, the IR wage bill is projected to increase by 10% from Rs905bn to Rs995bn, while pension spending is expected to reach Rs580bn in 2022-23.

Logistics focus

Proposing a ‘One Station-One Product’ concept intended to help local businesses and supply chains, Sitharaman said the railway would develop new products and ‘efficient logistics services’ for small farmers and small and medium enterprises. It would also work with India Post to develop a seamless integrated network for the movement of parcels. Another 100 multimodal freight and logistics terminals will also be developed over the next three years.

Under the branding of ‘Prime Minister GatiShakti’, the government is preparing a framework for co-ordinated development of multimodal logistics and a holistic infrastructure concept, which Sitharaman said would provide ‘a transformative approach for economic growth and sustainable development. The focus will be on planning, financing including through innovative ways, use of technology, and speedier implementation.’

What she described as ‘seven engines’ in the National Infrastructure Pipeline will be aligned with the PM GatiShakti framework. ‘The touchstone of the Master Plan will be world-class modern infrastructure and logistics synergy among different modes of movement — both of people and goods — and location of projects. This will help raise productivity, and accelerate economic growth and development.’

To ensure the seamless movement of goods and people, data exchange between operators of all transport modes is to be consolidated on a Unified Logistics Interface Platform, helping to reduce costs while providing real time information to all stakeholders. PPP concessions for the implementation of Multimodal Logistics Parks at four locations are to be awarded in 2022-23.

Meanwhile, innovative ways of financing urban metro networks and facilitating faster implementation will be sought. The minister said the provision of multimodal connectivity between urban mass transport and railway stations should be a priority.