Indian railway is running through a tough phase in the recent past years. The traffic in the railways stations seems to be diluting significantly. This in turn affected the revenue of the department. This undesirable drift in the Indian railways has forced the authorities to take advantage of every possible way of improving the revenue. The revenues have dropped drastically to a single digit…! Let’s have a deeper insight into these issues:
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The passenger earnings are anticipated to grow by 16.7 percent. However, the whole department was taken by surprise, when the earnings were dropped from 15% from last year to 7% for the present year. This is absolutely nowhere close to the expected growth.
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It is interesting to note that Railways earn more than two fifths of their revenue from freight traffic. In this context of freight traffic, the railways have witnessed an increase of 8.5 million tons against the estimated increase of 85 million tons!
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In such unfavorable conditions, the railways department has successfully controlled their working expenditure. Talking about the numbers involved here, the working expenditure increased just by 1.5% against the estimated value of 9.6%.
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Apart from the revenue crisis, the railways has to bear an additional burden of 32 thousand crore rupees to pay towards implementing the seventh pay commission recommendations. Adding to this, the budgetary support has sliced 8 thousand crore rupees due to the low spending by our railways.
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When you check out for the Indian railway PNR this time, note that the fares are likely to get increased by 5 to 10 percent in the coming budget sessions. Though the hiking of railway fares is strongly believed to be a politically unpopular move, the railways are left with no other option.
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Do you kn
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If the railways have to consider other options of getting revenue, it is through the monetization of the existing assets. The authorities are going to have a keen eye on these aspects.
ow the railway plan for the coming season…? It targets to improve the daily passenger carrying capacity from 21 million to 30 million. A 20% increase of the track length is likely to take place in the coming year. Finally, the freight carrying capacity is all set to increase from 1 billion to 1.5 billion tones. Not to forget that, Indian railways always had a passion for modernized infrastructure and the same is reflected in their actions.
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The above targets seem to be highly impossible to accomplish with the current status of our railway revenue. It is estimated that 8.5 lakh crores will be required by our railways to reach their targets. Several world organizations have accepted to aid financially in this context.
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BK committee has made several suggestions to increase the revenue of the railways. One such suggestion is creative financing. The public and the private investments will be a part of this plan. It is estimated that, this method can generate a whooping revenue of 3,29,800 crores.
The Indian railway is likely to concentrate on the steps to increase the freight revenue. It shouldn’t be a surprise for us, if it starts to explore the untapped areas like auto and FMCG, in search of revenue.