In the last few decades, there has been considerable underinvestment in rail infrastructure, thereby reducing the efforts required to expand, strengthen and modernize the Indian Railways. Further, the investment has been insufficient for introducing technological improvements, improving safety aspects and meeting the demands of both freight and passenger customers.

Challenges in speedy creation of rail infrastructure include

• Regulatory delays: The process of land acquisition is lengthy and cumbersome in India because of land disputes and rehabilitation and compensation issues. For instance, several cases have been filed in Supreme Court and High Courts against land acquisition for Dedicated Freight Corridors.
• Non-viability of decisions: The working of Indian Railways is caught up between making it a self-sufficient organization and serving it as a transport system for the poor, the result being rise in passenger fares and new trains and routes being decided on non-commercial reasons.
• Financial issues:
  • High operating ratio (at 98% in 2018) curtails the ability of Railways to make fresh investments through internal accruals. The alarming increase in operating ratio can be attributed to implementation of the Seventh Pay Commission award, reduced passenger fares, and declining market share in freight traffic.
  • High debt servicing costs put further strain on railway finances. It is set to rise at a much faster pace in the coming five years due to repayment obligations related to Dedicated Freight Corridors and High-Speed Rail (HSR) network, thereby putting a freeze on newer infrastructure projects.
  • Rail infrastructure development is highly dependent on government funding, which is limited. Further, few PPP projects which have been implemented are fraught with several hurdles including unrealistic cost estimates.
• Difficult terrain and weather conditions: Risk assessment in hazard zones and uncertain weather conditions such as in rugged Himalayan terrains and flood prone Brahmaputra region pose challenges in completing projects on time.
• Law and order problems: Many projects in the North-Eastern region, Jammu and Kashmir and Naxal-affected areas of Madhya Pradesh, Andhra Pradesh, Chhattisgarh, etc. are suffering on account of law and order problems.

Faced with the above challenges, a number of steps have been taken up by the government, including

• Increasing Capital Expenditure (Capex): Annual Average Capex has been doubled from Rs.45,974 Cr in 2009-14 to Rs. 99,512 Cr in 2014-19. In the recent Budget Estimate (2021), Capex has been further increased to Rs. 2.15 Lakh Crore.
• Vision 2024 document: It has been envisaged to achieve targets of 2024 Million Tonnes freight loading by 2024.
• National Rail Plan (NRP) 2030: It has been developed with a view to develop infrastructure by 2030 to cater to the traffic requirements up to 2050 and increase modal share of rail freight to 45%.
• National Infrastructure Pipeline (2020-25): It has dedicated investment worth more than 13 lakh crores to revamp the Indian Railways.

In addition, the need of the hour is to bring administrative reforms in Railways, introduction of new-age technology, prioritization of projects and their tim- bound execution and outcome-oriented action, privatization of some of the operations of the Indian Railways as suggested by the Bibek Debroy Committee etc.