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Plans to Boost Railways' Operational Revenue Likely in 2025

2024-12-31

Recent increases in budgetary allocations have accelerated Indian Railways’ capacity building and modernisation efforts across the country’s rail transportation infrastructure. However, whether these efforts will generate sufficient revenue to reduce reliance on taxpayer funds will depend on factors such as tariff policies, the ability to attract greater passenger and freight volumes, and private sector investments.

The national transporter is working on several initiatives aimed at boosting revenue from the passenger segment. The government is expected to introduce Vande Bharat sleeper trains in 2025, which will offer greater comfort on long- and medium-distance journeys. At present, ten such trains are under production, with the first prototype set for field trials soon.

At the same time, the railways plans to introduce more Vande Metro trains (renamed Namo Bharat Rapid Rail) for short-distance travel. Launched in September this year, the Vande Metro trains offer inter-city connectivity, combining modern amenities with an enhanced passenger experience.

A report by CRISIL highlights the railways' efforts in modernisation, which include the introduction of advanced locomotives and improved passenger services. Station redevelopment and the effective use of railway land have also boosted infrastructure and opened up new revenue opportunities. "Investments totalling Rs 17.4 lakh crore between 2016 and 2025 are modernising the railways and reinforcing its role as a key driver in India’s progress to a high-income economy," the report noted.

Experts predict that Indian Railways will increasingly turn to the Public-Private Partnership (PPP) model to ease financial pressures and accelerate infrastructure development. Despite previous challenges with PPP projects in rail stations and trains, there is optimism that railways will collaborate with the private sector on freight-side projects.