To grow India’s economy sustainably, the Indian government has given top priority to developing and modernizing its railways. Since every investment in the railways has a high multiplier effect on 250 industries, mass mobility is the key to a quantum leap towards becoming a Viksit Bharat (developed country).

• Also read: Why Indian Railways are transporting less freight

The railway network has benefited India in many ways: it promotes economic and social development through geographical connectivity, citizen mobility and trade, and also provides world-class logistics and transport infrastructure.

Realising this crucial balance, the Government of India has allocated a substantial amount of Rs 262 crore to the Indian Railways under the federal budget.

It is a clear signal of the company’s intention to create a modern, reliable and more sustainable future.

Economic backbone

Although India’s road sector is small relative to its large population, it contributes 14 percent of the country’s energy-related carbon dioxide emissions – a share that is expected to rise as the vehicle fleet expands. This paradox clearly makes rail a more sustainable mode of transport. Trains not only help countries meet their climate goals, but also provide additional economic benefits such as job creation, increased trade, better accessibility and connectivity, and densification of urban space.

Redefine tracks

At the heart of the government’s vision is the National Rail Plan (NRP), which outlines several strategies to make Indian railways future-ready, including increasing the share of rail in freight transport, improving service offerings for both freight and passenger services, reducing transit times for goods, reducing the overall cost of rail transport by nearly 30 percent and achieving net-zero carbon emissions by 2030.

Future focus

The railway sector clearly has the potential to develop a fast-growing and sustainable economy. According to industry reports, expanding India’s rail capacity through dedicated freight corridors and improved rail connectivity, combined with heavy-haul trains and multimodal freight hubs, can help increase India’s rail freight share to 40 percent by 2050.

This, in turn, would reduce the number of trucks on India’s roads by seven million and cut carbon dioxide emissions by a massive 4.3 gigatons by 2050.

However, India requires significant capital for its railways to complement road infrastructure for passenger and freight transport. To achieve this, securing private and institutional capital for under-construction projects is crucial. The government has commendably opened the door to private companies to expedite the completion of these projects.

The introduction of a production-linked incentive scheme focused on key railway components could benefit India significantly. This would boost domestic manufacturing and further strengthen the Make in India initiative. In addition, it is crucial to create a policy environment that encourages private sector participation and exports from India. This can be achieved through measures such as simplified taxation and fair contract terms.

Today’s investments in railways will enable the country to achieve its long-term goals, not only in terms of sustainability but also in promoting broader socio-economic growth – taking it one step closer to Viksit Bharat@2047.

(The author is Managing Director of Alstom India)