The Union Budget for the FY 2021-22 was announced at the Parliament by Finance Minister on 1st February 2021. Many changes were brought about in the budget relating to railways, aviation, highways and roads, new metros and more. This article focusses on budget 2021 highlights relating to railways and travel.
Table of Contents
Budget 2021 – Railways & Travel
Scrapping policy
The Voluntary Vehicle Scrapping Policy states that all commercial vehicles of 15 years and passenger vehicles of 20 years need to undergo a pollution testing procedure. If the vehicle fails thrice in the test then it will have to be scrapped. This will have two benefits. Firstly, our country aims to achieve 25% pollution control. Secondly, our country has vehicles which are decades old. This will ensure that old vehicles get replaced with new ones, thus giving the automobile industry a boost.
Railways
Unlike previous years where the Railway Minister would give a long speech on the Railway Budget, this time the Finance Minister, Mrs. Nirmala Sitharaman, summed up the entire 2021 railway budget within a few minutes. No new trains were announced. Railway ticket prices also did not see any revisions.
Dedicated Freight Corridor
By June 2022 dedicated freight corridor is supposed to be commissioned. Under this, two new railway tracks are being made. One will run from Amritsar to Mumbai while the other will run from Delhi to Kolkata. These new tracks will only run cargo rails on them. This will free up the usual rail lines which will in turn enable railways to run more passenger trains on them.
The future plan is to announce around 150 new private trains. Similar to privatized airways, trains will also run privatized. These new trains with higher ticket fares and premium service will be aimed at the medium financial sector.
Railways infrastructure spending
Rs 1.15 lakh crore has been assigned for railways development in the budget 2021. Out of this, Rs 1.07 lakh crore is going to be used for capital expenditure. This will entail the dedicated freight corridor, new redeveloped private railway stations, high-speed rail routes, bullet trains, and remodelling of old stations. Electrification is another spending point that will help to reduce pollution.
Safety measures
For employees and businesses, Budget 2021 has introduced several important measures. Key highlights include tax reliefs, support for small and medium enterprises, and various incentives aimed at boosting employment and business growth. To learn more about these specific changes and their impact, read Budget 2021 Highlights for Employees & Businesses.
A new safety measure will be implemented across all railway routes. This new anti-collision system will enable a GPS system in all locomotives. It will track any other locomotive in the vicinity of the train and automatically apply brakes to prevent any collision accident. This will help making the railways more safe and prevent any future accidents.
Vista dome coaches
Investors can also find significant updates in the Budget 2021. The government has outlined new initiatives and reforms designed to create a more favorable investment environment. These include changes in tax regulations, new investment opportunities, and measures to increase market transparency. For a detailed overview, check out Budget 2021 Highlights for Investors.
New vista dome coaches with bigger windows and glass roofs will be started soon. These coaches will provide a scenic view of the surroundings when travelling to exotic locations and add an elevated feel to railway travel.
National rail plan
The National Pension Scheme (NPS) has been highlighted as a beneficial investment option in the Budget 2021. It offers advantages over traditional schemes like PPF, EPF, and ELSS in terms of flexibility and returns. To understand why NPS could be a better choice for your retirement planning, read the detailed analysis in National Pension Scheme – Better than PPF, EPF, and ELSS?
The National Rail Plan will include planning for the Indian railways for 2030. This will majorly plan the capital investment to prepare for the future such as developing new railway routes and getting new assets on board. The first target of this plan is to achieve 35% increase in the railway freight mail share. It also includes plans for high-speed trains.
Aviation
In the aviation sector no new airports have been announced. Similar to how airports of tier 1 cities are privatized, the tier 2 and 3 cities’ airports will also get privatized now. This will help making these airports even better and more functional and also increase employment.
Road and Highways
Tamil Nadu, Kerala, Assam and West Bengal have received new new highway upgradation packages. Tamil Nadu will receive Rs 1 lakh crore, Kerala and West Bengal will get Rs 25,000 crore under this new package. Moreover, around 11000 km new roadways will be inaugurated as part of national highways.
Apart from this, luxury vehicle brands have been asked to start developing their parts within the country itself thus promoting Make In India campaign.
Metro Railways
Till now metro railways have been limited to major metro cities. But now 27 cities have been added to this list and development of metro railways will begin there. This will include other big and small cities such as Kochi, Chennai, Lucknow, Nagpur, Jaipur and others. Big investment funds have also been allotted to them for this project.
Watch the full discussion on budget 2021 railways below.
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Frequently Asked Questions (FAQs)
The Voluntary Vehicle Scrapping Policy requires commercial vehicles older than 15 years and passenger vehicles older than 20 years to undergo pollution testing. If a vehicle fails the test three times, it must be scrapped. The policy aims to reduce pollution by 25% and replace old vehicles with new ones, boosting the automobile industry.
Budget 2021 allocates Rs 1.15 lakh crore for railway development, with Rs 1.07 lakh crore dedicated to capital expenditure. This includes the development of the dedicated freight corridor, high-speed rail routes, new private railway stations, bullet trains, and station remodelling. Electrification is also a significant focus to help reduce pollution.
Budget 2021 expands metro railway development to 27 additional cities, including Kochi, Chennai, Lucknow, Nagpur, and Jaipur. Significant investment has been allocated for this project, aiming to improve urban transportation in both large and small cities beyond the major metro areas.
The National Rail Plan in Budget 2021 outlines the Indian railways’ strategic development for 2030. It focuses on capital investments to enhance future railway infrastructure, including new routes and assets. The plan aims for a 35% increase in railway freight mail share and includes high-speed train projects as part of its long-term vision.
The dedicated freight corridor, set to be commissioned by June 2022, includes two new railway tracks: one from Amritsar to Mumbai and another from Delhi to Kolkata. These tracks will exclusively carry cargo trains, freeing up the regular lines for more passenger trains. This project aims to enhance efficiency in both freight and passenger train operations.
Budget 2021 introduces a new anti-collision system across all railway routes. This system uses GPS technology in locomotives to detect nearby trains and automatically apply brakes to prevent collisions. The goal is to increase railway safety and prevent future accidents.
