Passengers travel in an overcrowded train in the eastern Indian city of Patna. A separate rail finance bill is due to be presented to India's parliament on Tuesday, two days before Prime Minister Narendra Modi's new administration presents its first Budget. File photo: Reuters

New Delhi - India’s new government will roll out plans next week to overhaul its sprawling rail network, dubbed the “lifeline of the nation”, which analysts say needs hundreds of billions of dollars of investment.

Two days before Prime Minister Narendra Modi’s new administration presents its first Budget, a separate rail finance bill will be presented to parliament on Tuesday following a controversial recent fares hike.

The country’s railway system is among the most extensive in the world, stretching from the foothills of the Himalayas to the southern beaches.

But observers say it has been neglected by successive governments over the past three decades of rapid economic growth, during which car ownership has surged and low-cost airlines have mushroomed.

“I’m very glad the government is addressing the chronic logistics problem,” Arvind Mahajan, an infrastructure specialist at KPMG, said. “It has a lot of work to cover.”

Rail remains the main form of long-distance travel for most of India’s 1.2 billion population, with around 23 million people travelling by train every day.

But some services are booked up for weeks in advance and overcrowding – especially in lower-class carriages that lack air-conditioning – means rail travel is often a miserable experience.

The network has a dreadful safety record, with a government report in 2012 putting the number of railway deaths each year at almost 15 000.

Many are killed falling off overcrowded trains or crossing the tracks. Others are charred to death while perched on coach roofs as high-voltage electricity courses through overhead wires.

As for freight, endemic delays make it sometimes impossible for businesses to predict when their goods will arrive.

Under the previous centre-left coalition, the main governing Congress party was happy to leave the railways ministry in the hands of a junior partner, which showed little inclination to push reforms.

While fares remained low, the ministry’s losses grew ever higher and it was haemorrhaging about $150 million (R1.6 billion) a month by the time Modi’s right-wing Bharatiya Janata Party (BJP) trounced Congress in May’s general election.

In a speech last month outlining the government’s priorities, President Pranab Mukherjee said “modernisation and revamping of railways is on top of the infrastructure agenda”.

Echoing similar pledges in the BJP manifesto, the speech included promises to improve safety, expand services in the remote north-east and build a network of freight corridors for farm produce.

The government then hiked passenger fares 14.2 percent and freight rates 6.5 percent – the steepest rise in 15 years.

Although there was a subsequent partial climbdown, Finance Minister Arun Jaitley said India “must decide whether it wants a world-class railway or a ramshackle one”.

Mahajan said reducing government subsidies on the railways would help it meet inflation reduction targets. “The government now needs to educate people… that subsidies will not help bring prices down, but rather shoot them up.”

DH Pai Panandiker, who heads the Delhi-based RPG Goenka Foundation think tank, said Modi – who as a boy helped his father sell tea on a platform – wanted the railways to stop being a strain on resources.

“Modi sees the railways network as a commercial enterprise and he realises that it must make both ends meet and can’t remain subsidised forever,” he said.

“All this hue and cry over the hike is politics and the common man knows this.”

But allied to the fare increases, analysts say federal and state governments must be prepared to invest vast sums.

“To expand, modernise and improve safety, the total bill could come to a staggering… $400bn over just the next 10 years,” Ajay Dua, a former top civil servant, wrote in the Economic Times.

“Currently, China invests $90bn every year in its rail system compared to our paltry $10bn. All those funds may not come from commuters and other users.”

Mahajan said the government would have to invest “somewhere around $300bn to $500bn” in the next decade.

Travellers acknowledge the need for investment but are reluctant to pay.

“It’s a wreck,” said Hari Sah, as he waited for a train at Delhi’s main station to take him back to his family in the northern state of Bihar.

“But I also need to see my family from time to time,” said Hari, who earns about $160 a month driving an auto-rickshaw in the capital and whose ticket cost $25.

“If I spend on travel, rent, food and send money back home then what will I save?”

One of the big questions will be whether Modi can develop a high-speed rail network, with China having offered its expertise. – Sapa-AFP