2021 Union Budget expectations: Railways expecting higher loading from car/bike industry

We spoke to a few major players as well as those who follow this business closely. Here is what they have to say and these reactions build up the expectations from the government with respect to rail transport.

By:January 4, 2021 5:23 PM

The traditional method of asking a car manufacturer to send his/her good to appropriate locations has mostly been through the railways. With time, inland waterways opened up and so did roads. These days, manufacturers tend to focus more on the latter as these work out to be effective, and quick. However, it has come to the fore now that the Indian railways are definitely now upping the game, promising shorter delivery times and efficiency as well. Express Drives believes the Indian Railways and their freight carrying capacity will play a major role in the upcoming 2021 Union Budget. We spoke to a few major players as well as those who follow this business closely. Here is what they have to say and these reactions build up the expectations from the government with respect to rail transport.

Rohan Dedhia, co-founder, Railofy, says *”The year 2020 has been unlike anything we have seen before and has revealed several gaps across industries that need to be fixed. Unlike a private enterprise, the Railways in India has to play a balance among its various roles- a social enterprise that seeks to be the backbone of transportation for the majority of India, a profitable enterprise that relies on the minimum budget support from the government, and a modern enterprise focusing on modernization. As we step into 2021, a post-Covid world, our expectation from the budget will be to counter in increasing passenger traffic and solving the long-standing waitlist problem in India by leveraging innovative technologies. Basic infrastructure and operational issues need to be solved for railways to make a headway in its role as a social and profitable enterprise in the near future as modernisation might still be years way.”

Maruti Suzuki on the other hand has been upfront about using railways. India’s largest carmaker has been using railways for the last six years and has so far offset more than 3000MT of CO2. 6.7 lakh cars have been transported in this fashion via the rail route. Rail transportation of Maruti cars started as early as 2014 and now even double decker flex-rakes are being used. MSIL claims that this is an efficient method and through this, they have managed to save more than a lakh truck trips on the highway as well as 100 million litres of diesel. In FY 2019-20, over 1.78 lakh cars were dispatched by rail mode, a 15 per cent increase over the previous year.

Kenichi Ayukawa, managing director & CEO, Maruti Suzuki India said, “Considering the increasing volumes, our team felt the need for large-scale logistics flow. We realised, that not only for expansion but also for risk mitigation we have to look beyond road mode logistics.”

It remains to be seen how the government factors in these reasons while allocating the Railway Budget provisions.

 

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