Indian Railways
Financial Structure and Electricity Costs
Indian Railways is the world's fourth-largest rail network and one of India's largest public sector enterprises. It is funded through the Consolidated Fund of India; its annual capital and revenue budgets have been merged with the Union Budget since 2017-18. Railways is also among India's largest consumers of electricity, using over 33 billion units (kWh) per year — primarily for electric traction (running trains), signalling, and station operations. Electricity is the second-largest operating expenditure for Railways after staff costs.
Railways procures electricity through two routes: (i) long-term Power Purchase Agreements (PPAs) with state utilities, and (ii) open access — buying directly from power exchanges or generators at potentially lower market rates. The surcharge dispute arose precisely because Railways used open access to reduce per-unit costs while avoiding the CSS meant to protect DISCOM revenue cross-subsidies.
- Indian Railways annual electricity consumption: over 33 billion kWh.
- Union Budget merger with Railway Budget: from 2017-18 (recommended by Bibek Debroy Committee, 2015).
- Potential outstanding CSS liability: ~₹15,000 crore (internal Railways estimate).
- APTEL (Appellate Tribunal for Electricity): statutory body under Electricity Act, 2003, adjudicates disputes from CERC and State Commissions; appeals lie to the Supreme Court.
- The dispute originated in 2015 when Railways sought open access connectivity for 100 MW procurement for traction substations.
● Tracked since February 26, 2026 · last seen May 24, 2026 · updates as the daily brief publishes