Economic Growth boosts Indian Railways’ Revenues

Riding high on the rebound in economic activity, Indian Railways recorded a healthy growth in earnings during the first two months of the current fiscal. Revenue earnings from passengers rose at a faster 7.5% compared to the 7.2% figure in goods earnings. However, goods account for over 65% of the railways’ total earnings.

Coal accounts for the largest chunk of the total goods earnings of the railways. While transport of coal rose 7.2% in FY10, this growth decelerated to 3.1% in April 2010. The reason for this lower growth has always been a topic of debate.

While Coal India — India’s largest thermal coal producer — claims there was a shortage of rakes to transport coal, an Indian Railways statement shifted the blame, saying Coal India had moved from a linkage regime to a fuel supply agreement (FSA) regime.

It had been decided by an inter-ministerial group that all FSAs will be routed through the ministry of railways to take into account logistics issues. Apparently, CIL did not comply with the directive, thereby hampering railways’ plans for movement.

Traffic movement of fertiliser, petroleum oil products and cement surged 9.6%, 15.1% and 13.8%, respectively. This complements the production data for April 2010, as captured by IIP.

	April-May 2010	April-May 2009	% growth  y-o-y
units: Rs crore
Total Earnings	14,714.04	13,710.66	7.32
Total goods earnings	10,004.02	9,333.48	7.18
Total passenger revenue earnings	4,119.37	3,831.02	7.53
units: million numbers
Numbers of passengers booked	1273.93	1203.51	5.85
units: million tonnes
Revenue earning freight traffic	146.41	141.63	3.37
Source: Press Info Bureau