Major Challenges Faced by Indian Railways in 2024

What’s in today’s article?

• Why in News?
• Accidents in Indian Railways – Statistics
• What is Kavach?
• What is Operating ratio of Indian Railways?
• Revenue stream of Indian Railways
• What are the Challenges faced by Indian Railways?

Why in News?

• In recent months, Indian Railways has experienced multiple train accidents. These include the derailment of eight coaches of the Agartala-Lokmanya Tilak Express in Assam on October 17, and a collision between a passenger train and a goods train near Chennai on October 11—both without casualties. 
• However, the Balasore accident on June 2, 2023, which claimed over 275 lives, highlighted serious safety concerns. 
• While pressure mounts on the Railways to enhance safety measures, it must also balance these demands with other operational and financial pressures that strain its resources.

Accidents in Indian Railways – Statistics

• Railway accidents in India have significantly decreased from 1,390 annually in the 1960s to about 80 per year in the last decade. 
• However, 34 consequential accidents occurred in 2021-2022, 48 in 2022-2023, and 40 in 2023-2024. 
• These accidents cause injuries, fatalities, infrastructure damage, and traffic disruptions. 
• Public records indicate that 55.8% of train accidents are due to Railway staff failures, 28.4% result from non-staff errors, and 6.2% are due to equipment failure. 
• In high-profile cases like the Balasore and Kavaraipettai accidents, faulty signaling systems were cited as the cause.

What is Kavach?

• About
  • It is India’s very own automatic protection system in development since 2012, under the name Train Collision Avoidance System (TCAS).
    • Later, it got rechristened to Kavach or “armour”.
  • Basically, Kavach is a state-of-the-art electronic system which was designed to help the Indian Railways achieve Zero Accidents.
  • It has been indigenously developed by the Research Design and Standards Organisation (RDSO) in collaboration with the Indian industry.
• Deployment and financial implication
  • The ‘Kavach’ has been installed on just 2% of Indian Railways' route length by February 2024. 
  • Despite calls for faster implementation after the Balasore accident, the system costs ₹50 lakh per kilometre and ₹70 lakh per locomotive. 
  • Analysis shows that its full implementation would account for less than 2% of the Railways' annual capital expenditure.
  • IR is facing criticism of the slow implementation.
• Effectiveness of Kavach in preventing accidents
  • Since 1990-1991, the Railways has classified nearly 70% of all major accidents as derailments, but only 2% of them were due to collisions. 
    • Kavach is effective only in avoiding collision.
  • ‘Kavach’ also may not have prevented the Kavaraipettai accident because the relevant error happened beyond the minimum margins ‘Kavach’ requires to assist.

What is Operating Ration of Indian Railways?

• The Railways' operating ratio (OR), which measures how much is spent to earn ₹100, is projected at ₹98.2 for 2024-2025.
  • It has shown a slight improvement from ₹98.7 in 2023-2024 but a decline from ₹97.8 in 2016. 
• A higher OR leaves less for capital expenditure, making the Railways more reliant on budgetary support and Extra-Budgetary Resources (EBRs). 
• Since the government merged the railway budget with the general budget in 2016-2017, the Railways gained easier access to gross budgetary support. 
• However, EBR-related dues have surged, rising from 10% of revenue receipts in 2015-2016 to 17% this year.

Revenue generation by Indian Railways

• Freight Services Performance
  • Performance
    • Freight services account for 65% of Indian Railways' internal revenue. 
    • While both passenger and freight revenues are rising, freight rates increased three times faster than passenger rates between 2009 and 2019. 
    • Nearly 30% of the railway network is overutilized, slowing freight movement to around 26 km/hr in 2016, which has hindered revenue growth.
  • Challenges
    • Despite the government's push for Dedicated Freight Corridors (DFCs) since 2005, only the eastern DFC is fully operational. 
      • The western DFC is partly ready, while others, like the east-west and north-south sub-corridors, are still in planning. 
    • Freight revenue heavily depends on coal, which accounted for half of the revenue and 45% of volume in the 2024-2025 estimates. 
      • However, the government’s shift toward renewable energy threatens future coal demand.
    • Additionally, the Railways faces challenges in maintaining infrastructure, with capital outlay for track renewal dropping to 7.2% in 2023-2024. 
    • Appropriations to the Depreciation Reserve Fund also fell 96%, further impacting maintenance and replacement of depreciating assets.
• Passenger Services Revenue
  • While freight services generate profits, passenger services incur significant losses. 
  • In 2019-2020, passenger revenue was over ₹50,000 crore, but losses totaled ₹63,364 crore. 
  • Losses increased to ₹68,269 crore in 2021-2022, largely due to the pandemic. 
  • In 2024-2025, study estimated passenger revenue at ₹80,000 crore, boosted by new trains, including the Vande Bharat, on high-traffic routes.
  • The Railways has replaced many cheaper sleeper and second-class coaches with more expensive AC coaches to raise passenger revenue. 
    • Despite these efforts, the last fare rationalization occurred in 2020.

What are the Challenges faced by Indian Railways?

• Balancing Affordability and Profitability
  • Indian Railways faces the challenge of balancing its goal of providing affordable travel while striving for profitability. 
  • Its financial struggles are worsened by rising wage and pension bills, as well as fuel costs.
• Stressful Working Conditions
  • Locomotive pilots experience high-stress conditions, including 12-hour shifts, especially in zones with heavy freight traffic. 
  • Frequent changes in standard operating procedures add to the pressure, further impacting safety.
• Network Congestion and Safety System Limitations
  • High network congestion has reduced the effectiveness of safety systems like ‘Kavach’ and a walkie-talkie-based system meant to warn trackside workers of oncoming trains. 
  • These systems are less effective in congested areas where trains run close together, as signals are spaced only 1 km apart, limiting their functionality.
• Revenue Shortfalls Affecting Safety
  • The Railways’ inability to generate enough revenue to fill gaps in budgetary support, coupled with increasing demands on revenue receipts and the need to ease congestion, has made it difficult to maintain and improve safety measures. 
  • This constant struggle to catch up with growing needs affects overall safety efforts.

Q.1. What are the primary safety challenges facing Indian Railways?
 

Indian Railways faces several safety challenges, including accidents caused by human error, equipment failure, and outdated infrastructure. Despite efforts to implement safety systems like Kavach, slow progress and overcrowded networks strain its safety operations, leading to concerns about passenger and freight safety.

Q.2. How does Indian Railways’ operating ratio affect its financial health?

The operating ratio, which measures how much the Railways spends to earn ₹100, is projected at ₹98.2 for 2024-2025. A higher operating ratio means less money is available for capital expenditure, making Indian Railways increasingly dependent on government support and extra-budgetary resources.

Source: What are the stress factors for Indian Railways?

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