Long-term Corporate Plan of Indian Railways

The Railways has a crucial role in the planned economic development of the country. In an environment of rapid technological changes, faster economic growth, and enhanced expectations of people, a long-term perspective of railway development is vital. A corporate plan provides this perspective, and spells out the objectives to be achieved and the strategies to be followed.

The first corporate plan of Indian Railways, covering a period of 15 years up to 1988-89, was published in 1976. Subsequently, a fresh corporate plan for the period 1985-2000 was prepared, which had envisaged an investment of about Rs 461,700 million in the railways system up to 2000 ad.

A new corporate plan for the period 2001-2012 has been prepared recently by Indian Railways. Some of the salient features of the new corporate plan are as following:

(i) Core value Customer above everything else; valuing the customer and providing them safety, security, punctuality, and reliability.

(ii) Core purpose To provide cost-effective rail and integrated intermodal/ multimodal transportation/logistics services with state-of-the-art, eco-friendly technology (including information technology) while maintaining the financial viability of the system.

(iii) The annual fund requirement for the corporate plan at 2000-2001 prices is estimated at about Rs 170,000 million.

1.6.1 Strengths of Indian Railways

The following are the strengths of the Indian Railways system.

(a) For a vast country with great distances and a large population, the railways have an inherent advantage over other modes of transport in their suitability for movement of large volumes of passenger and goods traffic over long distances.

(b) The movement of steel wheels on steel rails in the railway system has the basic advantage of low rolling resistance, which reduces energy requirements and haulage costs.

(c) Railways are more efficient than roadways in terms of land use.

(d) Railways are an energy-efficient mode of transport, particularly for freight traffic, and can use different forms of energy. Railways also cause relatively less environmental pollution than roadways.

(e) In densely populated urban centres, a rapid transit rail-based system is the most appropriate mode of transport for suburban intra-urban travel, as part of a city’s integrated transport system.

(f) Indian Railways is a well-established organization with a large pool of skilled and trained personnel.

(g) Being part of the Central Government, Indian Railways has the Government’s financial backing. At the same time, they have considerable financial autonomy.

(h) Indian Railways is a self-reliant system with respect to its major equipment needs.

1.6.2 Weaknesses of Indian Railways

The following are the weaknesses of the Indian Railways system.

(a) A large portion of the railway’s infrastructure is overaged, and in urgent need of replacement or rehabilitation. This includes track, motive power and rolling stock, signalling, operational, and maintenance equipment.

(b) In certain parts of the infrastructure, the technology is 20-25 years behind some of the developed railway systems. Consequently the productivity levels are comparatively low.

(c) Indian Railways has a large force of unskilled manpower. The training facilities need augmentation and modernization.

(d) A persistent resource constraint in the past has adversely affected the Railways’ development.

(e) Indian Railways carries a substantial ‘social burden’ in the form of continued operation of un-remunerative branch lines, subsidies on passenger and suburban travel, and even freight subsidy on certain commodities.

(f) In certain areas, pilferage and vandalism seriously affect operational efficiency.

(g) Railways are not suited for carriage of small quantities of freight particularly over short distances.

(h) Heavy investments are needed to build up railway transport capacity and the gestation periods are long.

(i) Transport capacity is volatile and cannot be recouped if not utilized continuously.

1.6.3 Planning Strategy

The development plans of Indian Railways have been drawn up within the

framework of the national five year plans. Plan outlays of Indian Railways as well

as those for the transport sector as a whole are shown in Table 1.6.

Tenth Five Year Plan (2002-2007)

The objectives of the tenth Five Year Plan are the following:

(a) Strengthening high-density networks—Investments towards building up capacity through National Rail Vikas Yojana for national projects and towards the completion of sanctioned rail projects.

(b) Technologically upgrading assets for improving efficiency, output, and the average speed of trains.

(c) Utilizing information technology for creating better customer interfaces.

(d) Improving the safety of operations by replacing overaged assets using the special railway safety fund.

Table 1.6 Plan outlay for the transport sector


Allocation in rupees (millions)


Fifth plan 1974-78

Sixth plan 1980-85

Seventh plan 1985-90

Railways outlay





Transport sector outlay





Total plan outlay





Transport outlay as % of total plan outlay





Railways outlay as % of total plan outlay






Allocation in rupees (millions)

Eighth plan Ninth plan Tenth plan 1992-97 1997-2000 2002-2007

Railways outlay




Transport sector outlay




Total plan outlay




Transport outlay as % of total plan outlay




Railways outlay as % of total plan outlay




(e) Rationalizing fund allocation to rail projects.

(f) Reducing energy expenditure by direct purchase of power from central generating agencies and by setting up power plants through joint ventures.

(g) Mobilizing additional resources through private/public participation in railway projects.

(h) Increasing freight and passenger traffic during the term of the plan.

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