Vande Bharat trains, with their semi-high-speed design and modern amenities, have transformed passenger travel across India. Now, with sleeper versions also being introduced, their popularity continues
to rise. Yet, despite operating these trains, Indian Railways pays a hefty annual fare for them, raising an intriguing question: who really owns the Vande Bharat fleet, and why does the Railways bear such costs if it is the rightful owner?
Who Really Owns The Vande Bharat Trains?
The answer is straightforward—Indian Railways is indeed the owner of Vande Bharat trains. Under the ‘Make in India’ initiative, these trains are manufactured in factories located in Chennai and other parts of the country. To date, Indian Railways has produced around 500 coaches for Vande Bharat trains, with many being exported to other countries.
Why Does Indian Railways Still Pay Fare?
One may wonder that if Indian Railways is the actual owner of the Vande Bharat trains, why does it still pay fare each year? The reason lies in the massive expenditure involved, as building these trains costs the Railways billions annually.
Indian Railways does not possess the lump sum needed for this expenditure and thus borrows funds from the market. This borrowing is facilitated by the Indian Railway Finance Corporation (IRFC), a company set up by the railways to manage financial needs.
How The Money Is Spent
Indian Railways uses funds from the Indian Railway Finance Corporation (IRFC) to build Vande Bharat and other train coaches, lay tracks, and carry out construction projects. IRFC finances these works and then leases them back to the Railways. In return, the Railways pays the money back as annual ‘rent’. This system ensures that the Railways is not burdened with heavy upfront costs, instead repaying IRFC gradually through earnings from train operations.
How Much Has Railways Spent?
In the financial year 2023-24, Indian Railways spent Rs 30,154 crore to cover both the principal and interest on borrowed funds. Of this amount, over Rs 17,000 crore was paid as the principal, and more than Rs 13,000 crore as interest.
By this period, the railways had acquired assets worth Rs 2.95 lakh crore on lease, including Vande Bharat trains, approximately 13,000 railway engines, and various other coaches. This substantial expenditure illustrates the financial strategy behind the modernisation of Indian Railways.
