New Delhi: Amid the economic slowdown, the Indian Railways’ earnings have witnessed a drastic fall, with the national transporter registering a Rs 19,000-crore shortfall by the end of October 2019 in the current fiscal.
The railways, informed sources say, has also exceeded its expenditure target so far this fiscal by over Rs 4,000 crore.
The public sector behemoth has suffered a slide on all fronts – passenger, freight and sundries earnings – in the April-October 2019 period as against budget projections.
While total earnings were projected at Rs 1,18,634.69 crore for the seven-month period, it has earned only Rs 99,222.72 crore, a shortfall of Rs 19,411.97 crore.
While this year’s targets may have been ambitious, current year revenue so far is also down by Rs 571.47 crore in comparison to the fiscal earnings during the same period last year. In April-October 2018, the national transporter’s earnings were Rs 99,794.19 crore.
Working expenses also exceeded the target of Rs 97,264.73 crore to Rs 1,01,363.90 crore, an increase of Rs 4099 crore for the same period.
In the passenger segment, the target was Rs 32,681.10 crore for April-October 2019 while the Railways earned Rs 30,715.10 crore only, leaving a gap of Rs 1966.33 crore. Goods earnings took a big hit as against the target of Rs 77,615.89 crore, it has earned Rs 62,733.17 crore, a minus of Rs 14,882.72 crore.
The sharp fall in freight earnings is a cause of worry as it is considered to be the bread and butter of railways — the railways does not make a profit in passenger sector and instead cross-subsidises it from goods revenue.
For the month of October, Railways’ total earnings target was Rs 18,196.40 crore. Here it has fallen short by Rs 4,808.73 crore as it earned only Rs 13,387.67 crore.
While the national transporter has discontinued with the practice of calculating operating ratio in its monthly financial report, it is expected to be beyond 108% with both earnings and expenditure failing target.
The operating ratio well above the 100% mark is an indication of deteriorating financial health of the Railways. The economic slowdown has affected the national transporter’s performance with the demand for wagons falling sharply.
It had earlier set a target of procurement of about 10,500 wagons which was reduced to 5,000 after a review of the prevailing situation and has further revised it to 1,860 at present due to the absence of demand.
As the railways are dependent on the market for its wagons, the drastic reduction in procurement has led to the market taking a hit of more than Rs 4,000 crore.
With the earnings not picking up pace, the railways had waived its “busy season” surcharge, which is levied on freight customers from October to June, hoping to wean away traffic from the road sector.Despite pressing many special trains to cater to festive season, passenger earnings was less in October than the same period last year.
In October 2019, railways earned Rs 4072.37 crore as against Rs 4126.21 crore earned in October 2018. Keeping the festive rush in mind, railways has kept the target at Rs 4548.28 crore for the month of October this year.
In order to prevent a further slide, the railways has proposed to undertake certain measures including reviewing trains with less than 50% occupancy and decrease their frequency or merge them. Other steps include retiring diesel engines which are over 30 years old to save fuel.
Arun Kumar Das is senior journalist who covers the Indian Railways can be contacted at firstname.lastname@example.org.