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Indian Railways improves performance in completion of projects under Modi govt

Akshay Narang by Akshay Narang
24 April 2019
in Analysis
Indian Railways improves performance in completion of projects under Modi govt

PC: Energy Infra Post

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The present tenure of the Modi government has witnessed an amazing turnaround in various sectors. The Indian Railways has turned out to be one such department that has delivered in a big way as far as performance and safety in travel are concerned.

However, an article published in the Economic Times has claimed, “205 railway projects report cost overrun of Rs 2.21 lakh crore”. The story seemed to indicate that the performance of the national carrier has gone down in the past five years. But if the real position is that over the term of the present government, the performance of Indian Railways has seen an inspiring improvement. This fact becomes clear if we compare the same reports – 398th Flash Report on Central Sector Projects (Rs 150 crore and above) published in December 2018 and the 342nd Flash Report on Central Sector Projects (Rs 150 crore and above) published in April 2014.

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The share of the Indian Railways in the total number of delayed projects has gone down in the last 5 years from 64.2% in April 2014 to 59.5% in December 2018. This indicates its success in completing railway projects.

What is even more important is that the cost escalation of delayed projects has actually gone down, which reflects Railways’ success in minimising project delay. In the month of April 2014, i.e. immediately before the Modi government came to power, delayed railway projects had 183% cost overrun but by December 2018 the cost overrun went down to 132%.

The Indian economy has grown over the last 5 years, and there has been a significant scale up in capital expenditure on infrastructure in the country. It must be noted that the absolute quantum of cost overrun can go up in such a situation even if there has been a massive percentage reduction in the share of delayed central projects and the rate of rise in cost overrun. In fact with the massive GDP growth rate in the tenure of the Modi government, the value of railway projects has also gone up significantly. It is therefore only natural that even though the proportion of delayed projects went down, the sheer value of the delayed projects went up. But this by no means implies inefficiency or poor performance on the part of the Indian Railways. In fact, the report of December 2018 itself covered projects worth about Rs 18.2 lakh crore, which is almost double of the Rs 9.45 lakh crore worth of projects it covered in its April 2014 report. Accordingly, projects of the Indian Railways too have increased similarly. However, despite a tremendous rise in the number of projects, the Railways has been successful in ensuring that the share of delayed projects and the rate of cost overrun actually went down.

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