Railways behind freight target due to tepid demand from core industry

Badly hit by the tepid growth of core industry, Indian Railways is estimating annual freight traffic of less than 1,110 million tonnes (mt), against the target of 1,190 mt.

"The growth expected in various core sectors (steel, cement etc.) has not come. Thus, we would be closing at much lower number," said a senior government official. According to the government data, core industry growth in April to November period in 2015-16 was only two per cent, compared with six per cent in the same period a year ago.

While presenting the 2015-16 budget, Railway Minister Suresh Prabhu had said, "The freight traffic is pegged at an all time high incremental traffic of 85 MT, anticipating a healthier growth in the core sector of economy, specially where rail co-efficient is high and by tapping full railway potential to cater maximum to demand-side."

Railways has transported 816.52 mt of goods between April and December 2015-16, compared with 808.57 mt in the corresponding period last year. "This is moderate growth. We wanted robust growth," said a government official.

In April-December period, freight traffic fell in cement sector by 3.8 mt , food grain sector by 7.64 mt and container services sector by 2.3 mt . "70 to 80 per cent of food grain is moved by Food Corporation of India (FCI). Food grain is lifted from Punjab and Haryana and moved to southern region, northeast region, etc. Earlier, we were moving around 900 trains every month (30 trains per day)… This has gone down on certain months to 400 trains per month because food grain is being procured locally by the state," said the official.

In the same period, railways saw an increase in freight traffic by one mt from finished steel, 0.6 mt from petroleum products, 2.25 mt from iron ore and 1.3 mt from the raw material used in steel plants.

According to the official, there has been a significant drop in the traffic generated by transportation of imported coal. Moreover, with the fall in ocean transportation fares, freight traffic generated by container services has gone down.

Railways ministry officials are now meeting with executives of all major industries -cement, coal, petroleum, parcel, container services, etc - to set targets for next budget and increase traffic in the coming financial year.