Plagued by excessive Government controls which lead to high cost of transportation and make Railways uncompetitive to the road sector, the pre-budget Economic Survey on Friday said there was a strong need to initiate reforms, including tariff restructuring, in the sector.
This would require substantial reforms in its functioning to reduce the cost of transportation and make it compete with the road sector, the survey, which was tabled in Parliament on Friday, said.
"The experiences with the transformation of telecom, roads and ports can serve as role models for the scale of transformation that may be required," it said.
"The Railways remain an extremely important area, given the fact that transportation by rail has the highest energy efficiency as compared with the options. This suggests that if the institutional mechanisms come about, then the cost of transportation by rail could be much lower than that seen in the road sector," it said.
Indian Railways has increased its freight traffic from 40.2 million tonne in April-December 2003-04 to 438 million tonne in the same period of current fiscal. The survey noted that this has been as a result of tariff rebalancing and rationalisation of fare and freight structures in the successive railway Budgets.
In terms of growth of rail infrastructure in the country, it said at the end of 2004, the network of the railways was spread over 63,221 route kilometre with around 28 per cent of the entire network been electrified.
{{/usCountry}}In terms of growth of rail infrastructure in the country, it said at the end of 2004, the network of the railways was spread over 63,221 route kilometre with around 28 per cent of the entire network been electrified.
{{/usCountry}}On railway safety, it said train accidents in the country per million train kilometers came down from 0.55 in 2001-02 to 0.44 in 2002-03 and further to 0.39 in 2003-04.
It said the Rs 17000 crore non-lapsable Railway Safety Fund (SRSF) was created in 2001-02 to wipe out the arrears in renewal and replacement of over-aged assets.
"The expenditure under SRSF in the first three years was Rs 6,504 crore. For the year 2004-05, the total allocation for SRSF is Rs 2,933 crore," the survey said.
It also highlighted that creation of Rail Vikas Nigam for implementing important and long pending projects and other intiatives involving state government in rail project has speeded up project completion.