“Challenges in the Indian Railways: A Closer Look at the Numbers”

The Indian Railways (IR), one of the world’s largest railway networks, has always played a crucial role in the country’s economic development. However, recent data suggests that this vital institution is facing some significant challenges

Debt Burden:

One of the first numbers that jump out is the debt burden on the Indian Railways. With a total repayment of principal at ₹22,229 crore and interest payments of ₹23,782 crore, the debt accounts for a substantial 17% of revenue receipts. This raises concerns about the sustainability of the railway’s financial position.

Passenger Services Losses:

The Comptroller and Auditor General of India (CAG) report revealed a staggering loss of ₹68,269 crore in all classes of passenger services during the fiscal year 2021-22. This massive loss raises questions about the efficiency and financial viability of the passenger segment.

Freight Performance:

The IR’s freight segment, on the other hand, has remained profitable. However, its growth is not keeping pace with the country’s economy. In the period from April to July 2023, the annual growth in freight volume stood at just 1%, while the economy was growing at 7%. This performance gap is a cause for concern.

Modal Share:

The share of the Indian Railways in India’s freight business has steadily decreased over the years, currently standing at around 27%. This decline is in stark contrast to its historical dominance of over 80% at the time of independence. The challenge here is to regain lost ground and boost the rail share in freight transportation.

Key Commodities:

The IR’s transport basket is dominated by 11 commodities, with coal accounting for approximately 45%, and iron ore and cement each contributing around 10%. While these commodities still make up a significant portion of the IR’s total freight volume, the railway’s share in their transport has dwindled over the years. For example, coal consumption increased from 602 million tonnes in 2011 to 978 million tonnes in 2020, but the rail share decreased from 70% to 60% during the same period.

Container Movement:

Despite initiatives like the private container train operation policy, introduced in 2006 to boost rail’s share in container movement, the share of exim containers moving in and out of ports has remained relatively stagnant, hovering between 10% and 18%. In 2021-22, it stood at just 13%, indicating that more needs to be done to make rail transportation more competitive in this segment.

Net Tonne Kilometres (NTKM):

The fluctuating nature of the Net Tonne Kilometres (NTKM) index further adds to the railway’s challenges. NTKM fell for two successive years in 2015-16 and 2016-17, recovered in 2017-18, but fell again in 2019-20. In the seven-year period ending 2021-22, NTKM grew annually at the rate of 3.5%, significantly less than the growth rate seen in road transport.

The data paints a complex picture of the Indian Railways—a vital institution facing financial challenges, declining market share in key sectors, and fluctuating performance metrics. However, it also highlights opportunities for growth, particularly in the freight segment, where modernization, improved efficiency, and innovative strategies can help regain lost ground. As the Indian Railways navigates these challenges, it must prioritize financial sustainability and explore ways to become a more competitive and integral part of the country’s transportation infrastructure.



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