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Indian Railways: The Important Role it Plays in India’s Economy

The Indian Railways is a crucial part of India’s economic development and has been serving the country for 162 years. It is the second-largest railway system in Asia and the fourth-largest in the world.

Importance of Indian railways in India's economy.
Importance of Indian railways in India’s economy.

The Indian Railways is organized into 17 zones, each headed by a divisional headquarters. It employs around 13 lakh people, making it one of the largest employers in India and providing livelihoods to many individuals. With more than 19,000 trains and 7,112 stations, it connects people, facilitates trade, and provides transportation infrastructure that supports economic growth.

Indian Railways History

Railways are the primary mode of transportation for both goods and passengers in India. They allow people to travel for various purposes such as business, sightseeing, and pilgrimage. They also enable the transportation of goods over long distances. For over 150 years, Indian Railways has played a significant role in connecting different regions of the country and driving economic growth. It has been instrumental in connecting the economic activities of different regions and supporting the development of industries and agriculture.

Distribution of Indian Railways Network

The distribution of the railway network in India is influenced by factors such as geography, economics, and administration. The fertile northern plains, with their large population and abundant agricultural resources, provided favourable conditions for the development of railways. However, the presence of rivers with wide beds required the construction of bridges. In the hilly regions of the peninsular part of the country, railways are built through low hills, gaps, and tunnels. Despite these challenges, the Indian railway system has been steadily expanding.

Indian Railways Future

Indian Railways Future

In the next five years, Indian Railways is expected to become the third-largest railway system in the world, accounting for 10% of the global market. This growth presents an opportunity to create one million jobs, making Indian Railways one of the largest employers in the country. Industries such as textiles, jute, and coal have benefited from the expansion of railways. The railways have facilitated the transportation of raw materials and finished goods, enabling efficient production processes.

Role of Indian Railway on Agricultural Development

Agricultural development has also been greatly influenced by railways. The introduction of railways played a significant role in commercializing agriculture. Farmers can now transport their agricultural products to distant locations, expanding their market reach and enabling them to sell their goods globally. Railways help in the swift transportation of perishable foods, agricultural tools, and other items over long distances, ensuring their freshness and minimizing wastage.

Indian Railway Network

Indian Railways has an extensive network with a total track length of 126,366 kilometres and 7,335 stations along a 67,956-kilometer route. It operates approximately 13,523 passenger trains and 9,146 freight trains daily. In the fiscal year ending in March 2020, Indian Railways carried a staggering 8.1 billion passengers. Moreover, from January 2021 to December 2021, the railway sector witnessed an 18% increase in freight loading, with a total of 1029.94 million tonnes of freight loaded. With over 1.3 million employees, Indian Railways stands as India’s largest employer and the world’s eighth-largest.

Indian Railways Foreign Direct Investment (FDI)

The Indian government recognizes the importance of investing in railway infrastructure and has implemented investor-friendly policies, including Foreign Direct Investment (FDI), to enhance freight and high-speed train infrastructure. This has attracted domestic and international firms to consider investing in Indian rail projects. Indian Railways has also taken initiatives to propel its growth. It released the National Rail Plan for India – 2030, which aims to create a future-ready railway system by 2030.

The plan focuses on building capacity to meet future demand until 2050 and increasing the modal share of railways in freight traffic to 45 per cent. Additionally, the government has approved the construction of a 235-kilometre semi-high-speed rail corridor between Pune and Nashik, Maharashtra, and achieved significant milestones such as the completion of the arch closure of the under-construction Chenab Bridge, the world’s highest railway bridge.

Indian Railways Contribution to the Economy

The contribution of Indian Railways to the country’s economy is substantial. In 2021, freight revenues for Indian Railways amounted to $16 billion. By aiming to support 45 per cent of the country’s modal freight share through infrastructure development, the railway sector aims to contribute approximately 1.5 percent to India’s GDP.

The recently released Economic Survey acknowledges that the railways will play a vital role in India’s economic growth. Capital expenditure in the railways has been increasing, with a five-fold increase compared to 2014, and the railways aim to achieve complete electrification by 2023. The National Railway Plan envisages the creation of a future-ready railway system that can meet the growing passenger demand while increasing the modal share of railways in freight to 40-45 per cent.

In conclusion, the Indian Railways is one of the most efficient and cost-effective modes of transportation for both passengers and goods. It is the economic lifeline of India, serving a vast number of passengers and facilitating the transportation of crucial commodities. Indian Railways plays a pivotal role in supporting industries, enabling agricultural development, and fostering economic integration across the country.

As the government continues to invest in railway infrastructure and implement progressive policies, the Indian Railways is poised for further growth and will continue to contribute significantly to India’s economic prosperity and development.

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