Freight revenue is the mainstay of the railway’s internal receipts, and it continues to cross-subsidise the passenger segment, although to a lesser extent in recent years.
By Nivedita Mukherjee
After a steep fall in April, Indian Railways’ freight loading recovered smartly in May-June, reflecting the resilience of core industries like coal, cement, iron ore & fertilisers and the undisrupted food grain supply chain.
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Goods loading by the transporter fell steeply from 103.1 million tonne (MT) in March to just 65 MT in April, but with the easing of lockdown curbs, the tonnage improved to 82 MT in May, and further to 93.3 MT in June. With the June cargo being 92% of the goods transported via the rail network in the year-ago month (101.3 MT), it appears normalcy has nearly been restored.
In the April-June quarter of FY21, railways carried 241.5 MT of cargo against 307.4 MT in the same quarter of FY20. The first quarter of FY21 saw freight earnings of Rs 22,266 crore as compared to Rs 32,403 crore in the year-ago quarter, a sharp drop of 31%.
Railways’ freight loading has been missing targets in the last few years, partly due to the economic slowdown but also because it has steadily lost cargo share to roads and highways. This has led to the railways setting modest, realistic targets in recent years. Of course, the transporter still enjoys a big, near-monopolistic share in the transport of some high-volume items.
The Budget target for freight loading in FY21 is 1,265 MT compared to 1208.3 MT achieved in FY20. Freight revenue is the mainstay of the railway’s internal receipts, and it continues to cross-subsidise the passenger segment, although to a lesser extent in recent years.
Freight receipts stood at Rs 1,13,481 crore in FY20, which was 64% of total revenue of the transporter during the year. The target for freight earnings for the current financial year is Rs 1,47,000 crore, apparently a tall order owing to the Covid-19 outbreak, but officials say the target is still achievable. Official sources also claim that last fiscal year’s tonnage level could be exceeded in the current year.
On its part, the railways is taking a number of steps aimed at boosting freight movement and revenues with focus on transportation of essentials, especially food grains. Loading of food grains during the April-June quarter of this year shot up 83% year–on-year to 13.63 MT. Food grains, flours and pulses have emerged as the commodity segment contributing the highest percentage increase in railways’ freight income this year (at 40%), a source said.