Railways likely to fall short of freight target for FY16 by 75-80 MT

There is serious concern in Rail Bhavan as freight movement is seen falling below target this fiscal, which would result in lower earnings and increase the need for financial support from the Union Budget for 2016-17.

According to senior officials, the Railways is expected to fall short of the 1,195 million tonnes (MT) of freight target fixed for 2015-16 by 75-80 MT. Freight movement is the bread and better for the Railways and, in fact, cross subsidises passenger fares for second class and suburban travel, which pile up a loss of around Rs 30,000 crore.

Senior officials lament that the Railways charged among the highest freight rates in the world to cross-subsidise heavy losses made in carrying suburban and second-class passengers at fares that are amongst the lowest in the world. Senior officials point out that while the bus fare for the 266 km New Delhi-Chandigarh route is Rs 350, the rail fare is only Rs 95. Similarly, while the rail fare between Delhi and Agra is a mere Rs 85, the bus fare is Rs 280 for the 194 km distance.

A comparative price chart prepared by railway officials shows that the general-class fare from Agra to Delhi is less than the cost of one kg of apples and the Delhi-Chandigarh fare is lower than the price of 140 gm toothpaste. While the budgetary target of an 85 MT increase in freight traffic during 2015-16 over the 1,110 MT moved in 2014-15 was fixed on expectation of a robust increase in the core sector output, this has not happened. The core sector has grown at a meagre two per cent during this fiscal dampening the demand for wagons.

The Railways has managed to transport only 816.52 MT of goods between April and December in 2015-16 compared with 808.57 MT in the corresponding period last fiscal. "This is moderate growth. We wanted robust growth," said a government official. Senior officials point out that there is an urgent need to hike fares so that more funds are available to run the cashstrapped transporter more efficiently. Since fares cannot be increased due to political reasons and there is little scope for any further increase in freight rates, the Railways will have to seek more funds from the Union Budget. However, with the stiff fiscal deficit targets, the finance ministry is finding it difficult to meet the demand for a substantial hike in the allocation of funds to the Railways.

(In Association with Mail Today)