Modi Faces Uphill Task to Get India’s Railways Back on Track, Reports Reuters

By Tommy Wilkes

NEW DELHI (Reuters) – Last week at New Delhi station, India’s fastest train, the Delhi-Agra express, conducted a test run that reached an impressive 160 kilometers per hour while en route to the Taj Mahal. Dubbed “semi-high speed” by local media, this speed is notable as it is three times the average of 50 kilometers per hour for journeys across the country. However, it falls significantly short of China’s fastest trains, reflecting the shortcomings of India’s extensive but underfunded railway system.

“The capacity of the track is almost saturated,” explained Anurag Sachan, the divisional railway manager for Delhi, from his office adjacent to the bustling station. “We could reach speeds of up to 200 km, but achieving that would require an entirely new track.”

Prime Minister Narendra Modi, who began his career selling tea outside a railway station, has committed to modernizing India’s railways and developing high-speed services suitable for Asia’s third-largest economy. On Tuesday, his newly formed government is set to present its first rail budget, with high hopes for ambitious initiatives aimed at enhancing the service that supports 23 million passengers daily.

One of the primary objectives involves attracting greater private investment into the predominantly state-controlled railway sector, which currently sees limited private participation mainly in suburban services and locomotive manufacturing.

During a speech in Kashmir, Modi hinted at the extensive renovations the railways require, expressing a desire for upgraded stations that surpass even airport standards. “Why do our railway stations need to be so outdated? Why can’t they be better than our airports?” he remarked while inaugurating a new segment of track in the mountainous region.

Reports indicate that Modi’s administration will propose public-private partnerships for railway infrastructure, and he is expected to update the nation on plans for a high-speed rail corridor between Mumbai and Ahmedabad.

“If the railways are to fully benefit the climate, the economy, and society, the government needs to attract significant investment, including from private and foreign sources,” stated G. Raghuram, a professor at the Indian Institute of Management, Ahmedabad, and a co-author of a report on railway modernization.

Raghuram pointed out that inviting private investment into freight services represents a straightforward shift that could boost the economy. The railway’s share of freight transportation has declined from 90 percent in 1950 to just one-third today, as congested tracks and slow speeds compel shippers to turn to road transport, exacerbating traffic issues.

A more challenging task for Modi will be finding a sustainable solution to the funding crisis plaguing the railways, which may include allowing foreign direct investment—something the rail networks have resisted in the past. According to economist Tirthankar Patnaik at Religare Capital Markets, the railways require an estimated 20 trillion rupees (approximately $334 billion) in investment by 2020, a figure far exceeding the 1.4 trillion rupees projected earnings this year, even after a recent fare hike.

“While there are some areas where the private sector can contribute, the bulk of the investment must come from the government,” asserted Shri Prakash, a former Railway Board member. He emphasized that Modi must find a balance between attracting profit-driven private investors and keeping ticket prices accessible for the millions relying on the network.

In New Delhi, railway manager Sachan reaffirmed the railways’ mission to “cater to the masses,” stating, “High speed is definitely important, but it is even more crucial to provide transport for our impoverished populace.”