India has a large and diverse transportation sector which caters to the needs of more than a billion people.The sector contributed around 6% towards the nation’s GDP. Mobility is one of the driving factors of progress and is necessary to achieve India’s goal of becoming a 5 trillion dollar economy. Road and Rail transportation are two of the most important and common modes of passenger traffic in the country, owing to affordability and connectivity. One of the seven major themes of Saptarishi mentioned in the union budget 2023-24 is last mile connectivity, the budget announced 100 critical transport infrastructure projects and an investment of 75,000 crores for transport infra projects. Investment in the transportation sector has consistently risen in previous budgets, and the trend continued this year. There is a 30% increase in the transport sector allocations when compared to the previous budget estimates.

In 2021, road transportation accounted for 4.8% of India’s GDP, and 90% of India’s total passenger traffic employs a road network commute. The total capital outlay on roads and bridges in the 2023-24 union budget is  270434.71 crores, an addition of 53,408.09 crore rupees from the previous budget. There is a significant  investment in the National Highways Authority of India(NHAI). The NHAI will receive 1,62,207 crores, an addition of 20,601.38 crores from the previous year. This can boost the road transport infrastructure of the country which is already the second largest in the world with about 6 million km of roads. The road networks should prioritise rural-urban connectivity, expressways and mobility in rural areas. The 19000 crores allocated for the Pradhan Mantri Gram Sadak Yojna can directly translate into the development of rural mobility.

The 107713.38 crores allocated for road works and 330 crores for research, training, studies and other road safety schemes can improve the quality of existing road networks and road transportation. These funds must be allocated strategically through consultation with the States to ensure efficient distribution and support capacity building. Apart from these Central Sector Schemes and allocations, 8493.21 crores are allocated by the  Ministry of Road Transport and Highways Grants from the Central Road Fund to the State Governments. This gives state governments the autonomy to divide and invest funds between rural and urban areas to strike a balance between the rural-urban investment.

Indian Railways, as one of the largest  employers in the country, has consistently been a focal point in budgeting over the years. This year also, railways have been allocated a total of 2,40,000 crores, the highest allocation given to railways till date.Of the total outlay, 31850 crores will be allocated for constructing new lines, while 35,349.4 crores will be set aside for gauge conversion and doubling. This highlights the concentration of infrastructure development in the railway sector to cater to the growing passenger traffic demand. Railways witnessed a 137% increase in unreserved passenger traffic last year and have continued to grow through the years both in terms of revenue and passenger traffic. The large amounts dedicated to tracking renewals, bridge and road safety works, computerisation, research, and signalling are towards capacity building and network expansion.Railways need to consider expanding total routes by increasing passenger traffic and the introduction of the railway network into the North East had already been initiated during the last financial year as part of the expansion. More new lines need to be developed to increase ridership and provide an alternative to road/water transportation. An effective and organised railway network working in tandem with other transportation systems can ease the burden on other modes of transportation and provide last-mile connectivity.

The 100 critical transport infrastructure projects identified in the budget for last and first-mile connectivity do not include the road or rail transportation sector. There are separate allocations for the sectors, but the government does not identify road and rail as major components of last-mile connectivity. The major investments towards last-mile connectivity are limited to building infrastructure and private public transportation systems. There is a lack of clarity on how last-mile connectivity will be improved using public transportation. There is also little concentration on research that is directed towards identifying the lack of regional last-mile connectivity. Funding infrastructure or providing infrastructure support alone will not result in a demand for public transportation and improved last-mile connectivity.

To achieve ‘Amrit Kal’, mobility plays a pivotal role. The present union budget emphasises more on infrastructure development and capacity building, but allocations for different modes of transport are not directly seen in the budget. The states can utilise their allocations to develop modes of transportation suitable to their respective landscapes. The states will have more expertise as to whether rail, road(buses) or water transportation is more suitable for them. Such a  balanced approach involving the Center providing infrastructural support and States providing the groundwork will result in comprehensive mobility development. Local-level bodies always hold the key to capacity building as the local bodies are the system of engagement and the final beneficiary of any investment. 

This Article was first published in samayam.com

Views expressed by the author are personal and need not reflect or represent the views of the Centre for Public Policy Research.

Kannan P R

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Kannan is an Associate at CPPR. He holds a Post Graduation in Applied Economics from Cochin University of Science and Technology and BA in Economics from St Alberts College, Ernakulam. He is an emotionally intelligent person who is constantly on the move to improve myself. He loves content creation, research and constant experience building and learning new things is always on my plate.

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