What’s inside:
This article explains who owns the Vande Bharat trains and why Indian Railways pays a large annual fee for them.
Vande Bharat trains are a modern addition to Indian Railways, designed for faster and more comfortable travel. These trains are made in factories located in Chennai and other parts of India. So far, around 500 coaches have been produced, and some have even been sent to other countries.
Indian Railways is the proud owner of these Vande Bharat trains, which are part of the ‘Make in India’ initiative. Even though they own the trains, the Railways pays a significant annual fee. This raises a question about why they pay this fee if they are the owners.
The reason behind this is the high cost of building these trains. Indian Railways needs to borrow money to cover these expenses, as they do not have the necessary funds upfront. The Indian Railway Finance Corporation helps them manage these financial needs.
Funds borrowed are used to build Vande Bharat trains, lay tracks, and other construction projects. The IRFC finances these works and leases them back to the Railways, which pays back the amount as annual rent. This way, Railways can manage costs without heavy upfront payments.
In the financial year 2023-24, Indian Railways spent over Rs 30,000 crore, covering both the principal and interest on borrowed money. This includes the cost of acquiring Vande Bharat trains and other assets, showing the financial plan for modernising Indian Railways.
Summary:
- Vande Bharat trains are made in India under the ‘Make in India’ initiative.
- Indian Railways owns the trains but pays an annual fee.
- They borrow money to cover the high cost of building these trains.
- Funds are used for trains, tracks, and other railway projects.
- In 2023-24, they spent over Rs 30,000 crore on these expenses.