Rail subsidies
Many countries offer subsidies to their railways because of the social and economic benefits that it brings. The economic benefits can greatly assist in funding the rail network. Those countries usually also fund or subsidize road construction, and therefore effectively also subsidize road transport. Rail subsidies vary in both size and how they are distributed, with some countries funding the infrastructure and others funding trains and their operators, while others have a mixture of both. Subsidies can be used for either investment in upgrades and new lines, or to keep lines running that create economic growth.
Rail subsidies are largest in China, Europe and India, while the United States has relatively small subsidies for passenger rail with freight not subsidized.
Social and economic benefits of rail
Railways channel growth toward dense city agglomerations and along their arteries. These arrangements help to regenerate cities, increase revenue from local taxes, boost housing values, and encourage mixed use development. By contrast, a policy of highway expansion, which is more typical in the U.S., promotes the development of suburbs at the periphery, contributing to increased vehicle miles traveled, carbon emissions, development of greenfield spaces, and depletion of natural reserves.Modern rail as economic development indicator
European development economists have argued that the existence of modern rail infrastructure is a significant indicator of a country's economic advancement: this perspective is illustrated notably through the Basic Rail Transportation Infrastructure Index.Subsidies by country
Europe
Total EU rail subsidies amounted to €73 billion in 2005.| Country | Subsidy in billions of Euros | Year | Billion passenger-km travelled in 2014 |
 GermanyChinaIn 2015, total domestic rail spending by China was $128 billion and was likely to remain at a similar rate for the rest of the country's next Five Year Period. A planned 8,000 kilometres of track will be added domestically, with a goal of better connecting existing domestic track with other foreign railway systems.IndiaThe Indian railways are subsidised by around Rs 2.4trillion, of which around 60% goes to commuter rail and short-haul trips.United StatesCurrent subsidies for Amtrak are around $1.4 billion. The rail freight industry does not receive direct subsidies.RussiaIn total, Russian Railways receives 112 billion rubles annually from the government.JapanThe privatized rail network in Japan requires few subsidies. The three biggest companies, JR East, JR Central and JR-West receive no state subsidy. |