Railways eyes 1,700 mn tonnes freight in FY23, 15% beyond Budget estimates

Sharp uptick in freight demand seen mainly from core basket of commodities. Railways to acquire 90,000 wagons over the next three years, will push for track development with respect to DFCs

On the back of robust freight loading numbers in the 2021-22 fiscal, Indian Railways is internally revising its freight target for 2022-23 to 1,700 million tonne (mt), which is over 15 per cent higher than the ministry of railways’ Budget estimates presented in February.

“The Budget estimated freight loading for the next fiscal at 1,475 mt, which was a conservative estimate. Our freight loading for this year was 1,418 mt, where we also achieved the highest-ever annual growth at 15 per cent. Naturally, we have to go over and above the Budget if we want to fulfil our objectives under the National Rail Plan (NRP),” a senior ministry official told Business Standard.

The ministry’s internal estimates point to a sharp uptick in freight demand, majorly coming from its core basket of commodities. The national transporter recently floated a tender for the acquisition of 90,000 wagons over the next three financial years, along with a push for track development with respect to dedicated freight corridors (DFCs).

The Centre has completed 1,110 km of construction on two DFCs while three other corridors were also recently sanctioned, Railways minister Ashwini Vaishnaw told Parliament.

The freight target of 1,700 mt for this fiscal is about 20 per cent higher than the goods loaded in FY22. Railways has so far not achieved this level of increment in freight loading in a single year. 

Under the National Rail Plan (NRP), the Centre wants to increase its modal freight share to 45 per cent by 2030. According to government estimates, consolidated demand for freight will be over 6,300 mt by 2026 and 8,220 mt by 2031.

According to these estimates, Railways would need to account for over 3,600 mt in 2031 to meet its modal freight share targets. In the medium term, it is targeting over 2,000 mt by 2024, the official said. Business Standard had previously reported that the national transporter launched an ambitious Rs 1-trillion-plan for various infrastructure projects, through which it wants to add Rs 79,000 crore to its freight revenue by 2024.

Sector experts have previously pointed out that the ambitious targets can only be achieved through a steady gain in modal freight share, as economic activity would have to scale up rapidly to be the sole factor influencing growth targets for the railways. “This year’s growth could have been attributed to pent-up demand in the economy, but it’s unlikely to be the case every year,” an analyst said.

"Rail freight witnessed a robust growth of around 15 per cent in FY 2022 to 1418 mt supported by improvement in reduced transit time and cost efficiencies(through long term tariff contract, traditional empty flow direction schemes). While the rising fuel prices and the consequent hike in road freight increases the competitiveness of rail as a mode but target of 1700 mt looks steep; 1500-1550 mt is achievable," said ICRA's Rajeshwar Burla.