By Umesh Chowdhary
India is banking on the power of the railways and is hoping to ride the fast train to economic prosperity in its quest to transform itself from an emerging economy into a ‘Viksit Bharat’. Since the first steam-powered locomotive rolled out in the 19th century, railways have served as the lynchpin of economic growth.
From enabling the Industrial Revolution to the growth of megacity metropolises, the railways have proven themselves to be a transformational force on par with the motor car, the airplane, the Internet, and the smartphone. To put it simply — the railway has powered the rise of empires like colonial-era Great Britain, and nations like the United States and even India, to an extent.
But, despite our vast railroad network, we have thus far only scratched the surface of the railways’ potential. From their ability to move goods and people around the country quickly and economically to the role they can play in helping make our cities more livable, and even helping India meet its climate goals, the railways are central to our growth aspirations.
It’s no surprise, then, that we are now going all out to harness the full scope of their transformative power.
Over the last ten years, the government’s expenditure on railways has soared from Rs 45,000 crores to Rs 2.55 lakh crore for 2024-25, as per the latest interim budget presented by the Finance Minister earlier this year. This is being spent on everything from the construction of metro networks and the introduction of high-speed trains like the Vande Bharat, to the modernization of stations, coaches, and the network as well as the creation of dedicated freight corridors.
To be sure, the government is betting big on the railways as part of a wider infrastructure push. But, the benefits are time-tested and proven the world over.
In a recent article, Minister of Railways, Ashwini Vaishnaw highlighted that investing in railways can yield significant returns potentially four times the level of investment due to the multiplier effect created by railway lines. Additionally, every rupee invested in the railways has a substantial impact on around 250 industries, ranging from hospitality to information technology and telecoms.
Railways size and scale
Then there’s the sheer scale of employment that the Indian Railways as a corporation provides. India’s railways are the country’s second-largest employer, behind only the Armed Forces, providing jobs to 12 lakh people.
In fact, in 2018, more than more than 25 million aspirants, greater than the size of Australia’s population, applied for 90,000 job vacancies with the Indian Railways. Then, there’s the opportunity to move large amounts of goods and people around the country speedily and economically. Here, the dedicated freight corridors the government is building have a key role to play.
The DFCs, as they are known, will allow for the seamless and efficient movement of goods. Goods trains using such corridors can travel at an average speed of 50-60 km/h, thrice the speed they averaged on regular train tracks. This will pave the way for more goods to be transported via rail as opposed to by trucks crisscrossing the country, creating a more robust logistics network while also slashing emissions.
At the same time these corridors will also decongest the rail network, allowing passenger trains to transport people quicker and more efficiently. Speaking of people, railways enable mobility and migration.
Until the Konkan Railway line was laid down, the entire Konkan belt was poorly connected to the rest of the country. The only option was road travel. People living in the region were dependent on the erratic schedules of state transport buses. They were thus excluded from the economic opportunity that lay tantalizingly close yet so far in nearby Mumbai.
Today, despite being a single-track railway, the Konkan Railways has brought Mumbai to within a three-to-five-hour commute window of some of the biggest population centers in the Konkan belt. With so many trains and people passing through, it has at the same time spurred the development of the region itself with previously small towns and villages witnessing a boom in economic activity.
A study carried out by the International Initiative for Impact Evaluation think tank found that the Konkan railway drove labour migration to more prosperous regions. In doing to it “encouraged diversification of economic activities and of workplaces by making it easier to access employment opportunities.”
Migration within a country is key to economic growth. The Konkan Railways enabled migration for economic opportunity for the people of the Konkan then created a multiplier effect that led to the development and enrichment of the region as a whole.
That’s because when people migrate for work, they remit money home. Therefore, if there is enough migration, enough money moves from the cities to the hinterland via remittances, in turn spurring development and creating new economic opportunities there.
However internal migration in India is among the lowest in the world. According to a study published in the Economist, only 29 per cent of Indians migrate internally. Of that, only 12 per cent migrate from one state to another while only 11 per cent migrate for work.
The expansion of the rail network across India and the addition of new capacity with the introduction of new trains can pave the way for more people to migrate to cities who can then in turn through remittances drive economic growth in the regions they come from.
Similarly, within cities, the construction of metros can improve labour market access, boost labour force participation, give companies access to a wider pool of talent and improve productivity by slashing instances of late log-ins and absenteeism.
At the same time, they can help decongest roads and drive improvement in a city’s air quality. Despite the investment, there’s no disputing the fact that India’s bet on the railways is the key to unlocking economic growth. It puts the country on track to realizing the long-cherished dream of the emergence of a Viksit Bharat.
(The author is vice chairman and managing director of Titagarh Rail Systems Limited. Views expressed are the author’s own and not necessarily those of financialexpress.com)