Passenger volumes dip for third year

Passenger volumes carried by the national transporter touched a peak of 8,420 mn in 2012-13 and have dipped to an estimated 8,101 mn in the previous financial year

While the government was busy focusing on ways to increase earnings from railway freight, passenger numbers, a key factor for long-term growth of Indian Railways (IR), are falling. Also, with most routes running at full capacity utilisation, the volumes are not expected to rise in the next couple of years until dedicated freight corridors kick-in in 2019.

IR passenger volumes have been consistently declining since 2012-13, falling 0.2 per cent, two per cent and 1.4 per cent, respectively, in the three financial years since then. This is compared to the average volume growth of between two per cent and seven per cent in the five year-period before 2012-13.

The railway ministry has said the fall is due to decline of volumes on short-distance travel. While data exists for class-wise travel of passengers, the ministry does not release data on travel distance-wise volumes, making an accurate analysis of the disturbing trend difficult.

Thanks to its persistence, the trend has turned from worrisome to alarming, experts say. They attribute it to shifting of passengers from railways to other means of travel, due to improvement in road connectivity, the expanding intra- and inter-city metro network, and the shrinking differential in high-end rail and low-end air travel.

Passenger volumes carried by the national transporter touched a peak of 8,420 million in 2012-13 and have dipped to an estimated 8,101 million in the previous financial year. "The fact that the declining trend has become consistent year-after-year, it cannot be ignored as a one-off event anymore. Railways has already been losing freight volumes to roads for many years. That shift has caught up in passenger segment also," said Amrit Pandurangi, senior director at Deloitte.

He said the trend has become more important and worth a study, given the indicators of overall economic growth. While the upper end of the passenger volumes have shifted to the low-cost airlines and the car industry, the lower end passengers have moved to the rapidly improving bus service, Pandurangi said.

IR's total passenger volumes dipped 1.4 per cent to 8,101 million in 2015-16, from 8,224 million in FY15. Of the total number of passengers carried in 2015-16, 54 per cent (4,407 million) belonged to the suburban category, while the non-suburban category accounted for the rest 3,694 million. Further, second-class passengers represented 93 per cent of total in the suburban category and 96 per cent in the non-suburban category.

This share of second class passengers in total volume has remained constant over years. However, the total volume of suburban passengers fell from the peak of 4,552 million in 2013-14 to 4,505 million in 2014-15 (one per cent decline) and further to 4,407 in 2015-16 (2.1 per cent decline).

Asked to explain the dip in passenger volumes, Railway Board Chairman A K Mittal said, "The number of passengers has come down on short-distance (50-100 Km) traffic. This is because there are alternatives available in road transport and maybe people have migrated. Because of better road conditions, people might have found it better to travel by roads. But, in the long distance reserved sector, there has been a positive trend of 4.5 per cent or so. Besides, overall earnings growth has gone up by 7.6 per cent as compared to the previous year."

"Statistics supplied by the ministry suggest the volumes in at least the Inter-city Mail and Express category have remained consistent. Does that mean the fall is being recorded in either the ordinary passenger trains or in the suburban sector? We will never know until a study is done. It is worrisome the rail ministry has not studied the phenomenon so far," said a former Railway Board financial commissioner.

He added that, if not corrected on time, Indian Railways may have to pay a heavy price as a result of this disturbing trend. "A big chunk of railways' revenue comes from coal freight. But that is likely to taper off in the long run as non-fossil fuel based growth catches up. The ministry must remember that the future of railways is the passenger segment," he said. Despite the dip in volumes, the rail ministry is budgeting for a 10 per cent jump in passenger earnings to Rs 51,000 crore in 2016-17 as compared to Rs 45,000 crore in the current fiscal.