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Despite raising freight rates by 6.5 per cent a few weeks earlier, the railways ministry has not revised its estimate for goods earnings at Rs 1,05,770 crore for 2014-15, the same as in the interim Budget presented this February.
However, compared to 2013-14 when earnings were Rs 94,000 crore, these should rise 12.5 per cent. The growth in freight traffic is expected to be 4.9 per cent, at 1,101 million tonnes, an increment of 51.1 mt over 2013-14, based on trends in the first two months, Minister D V Sadananda Gowda said in his speech on Tuesday.
The Railways run 7,421 freight trains, carrying about three mt, every day. "Having achieved the distinction of entering the select club of railways of China, Russia and USA in carrying more than one billion tonnes (annually) of freight, we now target to become the largest freight carrier in the world," he said.
The rates are to be linked to revisions in fuel prices. The minister also noted that upward pressure on rates to compensate for subsidised passenger fares had meant a loss of traffic. "The share of railways in freight traffic has come down consistently in the past 30 years," he said. "Though the freight business has grown steadily over the years, Indian Railways carry only 31 per cent of the total freight carried in the country by all modes."
D P Pande, member (traffic), Railway Board, said: "If the economy grows, we will grow according to that but while there is clear growth potential for the services sector, we will have to wait and watch how the core sectors of the economy grow in the coming year."
Ravi Uppal, managing director and group chief executive officer, Jindal Steel and Power Limited, said, "Last month's increase in freight rates by 6.5 per cent was completely unwarranted as it directly impacts the cost of goods in the manufacturing sector. Besides, critical assessment of operational efficiencies, diligence on freight realisation and ascertainment of economic viability of existing networks are the desirables that have not found any mention in the budget.
A third of freight trains run empty, since return traffic at the existing rates isn't there. To garner additional revenue, a project is envisaged whereby an automatic rebate from the computerised FOIS system will become available to customers offering traffic over the present expected levels of load movement.
The minister said to develop a network of freight terminals, a policy of private freight terminals on a public-private partnership model is being refined. Online registration of demand for wagons will be launched in two months, facilitating online payment of fee and registering the demand.
