Introduction

India’s urban population is projected to double from 400 million to 800 million by 2050. This demographic shift presents both challenges and opportunities for transforming the country’s urban infrastructure. To meet the growing needs of urban areas, India will require an investment of approximately ?70 lakh crore by 2036, a figure significantly higher than current spending levels.

Financial Challenges in Urban Infrastructure

• Investment Gap
  • The current annual investment in urban infrastructure stands at ?1.3 lakh crore, which is only 28% of the ?4.6 lakh crore needed annually.
  • A large portion of the existing investment, around 50%, is directed towards basic urban services, with the remainder allocated to urban transport.
• Municipal Finances
  • Municipal finances have remained stagnant at 1% of GDP since 2002.
  • Despite increased transfers from the central and state governments, municipal bodies face financial strain.
  • The contribution of municipal own-revenue has decreased from 51% to 43%, indicating a reduced financial independence.
• Revenue Collection Inefficiencies
  • Urban local bodies (ULBs) are collecting only a small fraction of their potential revenues, with property tax collections representing just 0.15% of GDP.
  • Cost recovery for essential services like water supply and waste management ranges between 20% and 50%, pointing to a significant funding gap.
• Underutilization of Resources
  • Cities like Hyderabad and Chennai utilized only 50% of their capital expenditure budgets in 2018-19.
  • Central schemes such as AMRUT and the Smart Cities Mission also showed suboptimal fund utilization, with utilization rates of 80% and 70%, respectively.
• Decline in Public-Private Partnerships (PPPs)
  • Investments through PPPs in urban infrastructure have seen a sharp decline, from ?8,353 crore in 2012 to ?467 crore in 2018.
  • This drop is attributed to limited project-specific revenues and inadequate funding mechanisms.

Structural and Administrative Challenges

• Weak Governance and Fragmented Management
  • Fragmented governance and limited administrative autonomy hinder effective urban planning and resource allocation.
  • Municipal bodies often lack the ability to undertake long-term planning and project execution due to these governance challenges.
• Climate Vulnerability and Sustainability: Urban areas are increasingly vulnerable to climate risks like floods and heatwaves. However, many urban infrastructure projects fail to incorporate climate resilience in their planning, exacerbating the long-term vulnerability of investments.
• Inadequate Land Management
  • There is poor coordination between land use planning and infrastructure development, resulting in urban sprawl and inefficient transportation systems.
  • Opportunities to capitalize on the land value generated by metro and rail projects remain underutilized.

Measures for Transforming Urban Infrastructure

• Streamline Revenue Collection: Leverage technology to improve property tax collection systems and enhance cost recovery in essential services.
• Enhance Fund Utilization: Strengthen municipal capacities for effective project planning and incentivize the timely use of allocated grants.
• Scale Public-Private Partnership (PPP) Investments: Develop a pipeline of bankable projects and create risk-sharing mechanisms to attract private sector investments.
• Decouple Project Preparation from Funding: Ensure that infrastructure projects are thoroughly prepared for financial, social, and environmental sustainability before seeking funding.
• Promote Urban Innovation: Establish urban innovation labs and encourage public-private-academic collaborations to foster the adoption of advanced technologies.
• Empower Municipalities: Grant municipalities greater financial autonomy, enabling them to raise capital through municipal bonds and other debt mechanisms.
• Integrated Urban Planning: Align infrastructure development with land use, transport, and housing requirements, while integrating climate resilience into planning.
• Capacity Building: Invest in the training of municipal staff to improve governance and financial management capabilities.

Conclusion

India’s expanding urban population presents a major opportunity for economic growth. However, addressing the financial and structural challenges in urban infrastructure is crucial for harnessing this potential. By adopting a combination of short-term actions, medium-term strategies, and long-term reforms, India can create sustainable, resilient urban infrastructure that meets the growing needs of its cities, fostering inclusive development and long-term prosperity.

In News:

On October 17, eight coaches of the Agartala-Lokmanya Tilak Express derailed in Assam with no casualties. On October 11, a passenger train rear-ended a stationary goods train near Chennai, also with no casualties. Indian trains have been involved in multiple accidents of late. The Balasore accident on June 2, 2023, had the greatest death toll, more than 275, yet pressure on the Railways to improve safety competes with pressures straining its subsistence.

Railway Accident Trends

• Decline in Accidents Over Time:
  • From 1,390 accidents per year in the 1960s, railway accidents have reduced to about 80 accidents per year in the last decade.
• Recent Consequential Accidents:
  • 34 accidents in 2021-2022
  • 48 accidents in 2022-2023
  • 40 accidents in 2023-2024
• Primary Causes of Accidents:
  • 55.8% due to staff errors (railway personnel).
  • 28.4% due to non-staff errors.
  • 6.2% due to equipment failure.
• Role of Signalling Failures:
  • Major accidents, such as Balasore and Kavaraipettai, were attributed to signalling system failures.

Key Safety Technologies and Measures

• Kavach System:
  • Kavach is an automatic train protection system designed to prevent collisions by monitoring train positions and activating alarms or braking.
  • As of February 2024, Kavach was implemented on only 2% (1,465 route km) of the railway network, limiting its effectiveness.
• Signalling System Overhaul:
  • Outdated and faulty signalling systems contribute significantly to accidents. Both Balasore and Kavaraipettai incidents were linked to failures in signalling infrastructure.

Financial Strain on Indian Railways

• Operating Ratio (OR):
  • The Operating Ratio (OR) in 2024-2025 is estimated to be ?98.2, indicating that the Railways spends ?98.2 for every ?100 earned.
  • A higher OR reduces available funds for safety improvements and infrastructure upgrades.
• Budgetary Constraints:
  • The 2023-24 budget showed a 7.2% reduction in capital outlay for track renewal and a 96% decrease in the Depreciation Reserve Fund, which is used to replace aging assets.
• Revenue Imbalance:
  • Freight services account for 65% of Railways’ revenue but face capacity constraints, with 30% of the network operating at over 100% capacity.
  • Passenger services, however, continue to incur significant losses, with ?68,269 crore loss in 2021-22.

Challenges in Rail Infrastructure

• Slow Infrastructure Development:
  • The government's Dedicated Freight Corridors (DFCs), intended to alleviate congestion, are severely delayed:
  • The Eastern DFC is the only fully operational corridor.
  • Other corridors, including the Western DFC and additional planned routes, remain incomplete.
• Track and Equipment Maintenance:
  • Ongoing delays in upgrading and maintaining essential infrastructure (tracks, wagons, signalling) contribute to the rising number of accidents.

Loco Pilot Working Conditions

• Extended Working Hours:
  • Loco pilots often work 12-hour shifts due to manpower shortages, leading to fatigue and increased risk of human error.
  • Stress and exhaustion are significant contributors to accidents caused by human error, including Signal Passed at Danger (SPAD).

Recommendations for Improving Railway Safety

• Loco Pilot Vacancies:Immediate recruitment to fill the 18,799 vacant loco pilot positions to prevent overworking and reduce fatigue-related errors.
• Expand Kavach Deployment:Accelerate the nationwide installation of the Kavach system, particularly on high-risk and high-traffic routes, to enhance safety.
• Complete Dedicated Freight Corridors (DFCs):Expedite the completion of DFCs to ease congestion and increase freight movement efficiency.
• Independent Railway Safety Authority:Establish an independent Railway Safety Authority with statutory powers, as recommended by the Kakodkar Committee (2012), to enforce safety standards and monitor implementation.
• Improve Signal Infrastructure:Invest in advanced and reliable signalling systems to prevent errors stemming from outdated or malfunctioning infrastructure.
• Regulate Working Hours:Enforce strict work hour limits to reduce fatigue among railway staff and ensure proper rest between shifts.
• Strengthen Trackside Infrastructure:Install fencing along tracks in high-risk areas to prevent cattle run-overs, a common cause of derailments in rural and semi-urban areas.

Conclusion

• Indian Railways faces a complex set of challenges, balancing safety requirements with financial constraints. Despite technological advancements like Kavach, its limited deployment and outdated infrastructure continue to present significant risks.
• A holistic approach to reform is needed, including addressing manpower shortages, upgrading safety technologies, and investing in infrastructure development. This will be essential for reducing accidents, improving safety, and ensuring the long-term sustainability of India’s vast railway network.