Freight traffic by Indian Railways drops 0.97% in first 7 months of FY20

Freight traffic handled by the Indian Railways almost remained static with a minor dip of 0.97 per cent during the first seven months of the financial year, owing to improved traffic from sectors such as minerals and ores, petroleum and container. This is despite a considerable dip in key sectors such as coal, cement, iron and steel and foodgrains.
 
Till November 2, loading by the Railways was 689.88 million tonne (mt) compared to around 683.19 mt during the same time last year. The share of coal that contributes to over 48 per cent of the total railways traffic dipped by 2.3 per cent to 333.1 mt, against 340.94 mt during the April to November 2 period of 2018-19. 
 
“The Railways has taken necessary measures to arrest the decline in key commodities like coal. This include waiver of our busy season surcharge on freight transport starting October,” said an official.
 
To boost industrial activities, the Railway Board had deferred its busy season charge of 15 per cent levied between October 1 and June 30. The move was expected to give an impetus to cement, steel, food grains and fertiliser loading. During the first seven months of 2019-20, iron and steel and foodgrains too saw a drop of 4.7 per cent and 4.8 per cent respectively, compared to the same time in 2018-19.
 
Interestingly, the commodities that helped in maintaining the freight traffic from serious dip included minerals and ores with 7.27 per cent, petroleum products with 3.94 per cent and container traffic with 2 per cent increase. Last week, India’s core sector output posted a decline of 5.2 per cent in the month of September, as a sign of industrial slowdown. The eight core industries – including coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity – have 40.27 per cent in the Index of Industrial Production (IIP). IIP numbers had its worst performance over seven years in the month of August when it contracted by 1.1 per cent.
 

A decline in railway's coal traffic was due to a lower intake from power sector. Coal production has seen a drop of 21 per cent in September, which subsequently led to a dip in electricity generation by 3.7 per cent in the month of September. For the last three financial year, freight traffic and revenue of railways was on an upward trend owing to several policy measures taken by the government.
 
Despite a dip in traffic, earnings from freight saw an increase of 2.3 per cent so far in 2019-20 to Rs 70,814 crore as compared to Rs 69,207 crore during the same period last year. There was a 4.19 per cent in coal and 15.15 per cent in minerals and ores earnings. According to sources, this was mainly due to rationalisation and rise in tariff.
 
On the other hand, the number of passengers including suburban and non-suburban, too saw a decline of 1.17 per cent from April 1 to October 20 period to 4,641.13 million compared to 4,696.06 million last year. During the period, passenger revenue increased by 4.23 per cent to Rs 2,9367.47 crore.