Indian Railways is essential for national unity and is often referred to as the backbone of the economy. In recent years, the railways have extended their network to the farthest regions of the country. At present, it ranks as the fourth largest rail system globally.
Net income of Indian Railways has been decreased!
According to a media report, a report submitted to the Lok Sabha last week, the Parliamentary Standing Committee requested the ministry to reassess its passenger fares on different trains. The committee reported that the net income of Indian Railways has been decreased in FY23 and FY24. The committee indicated that the net revenue projected for FY25 is budgeted at approximately Rs 2,800 crore.
Indian Railways stated that enhancing the operating ratio has consistently been its main focus. The railways indicated that it is necessary to implement strategies to boost revenue and manage costs. At present, through multiple initiatives, its operating ratio has enhanced to 98.43 percent for the financial year 2023-24.
“The railways stated that these initiatives comprise several efforts aimed at boosting passenger revenue by maximizing the use of existing facilities, operating special trains, increasing train capacity, launching a flexi-fare scheme for premium trains, offering discounts for low-occupancy classes and sections, implementing unreserved fare for AC Chair Car and Second Class in AC-3 and Sleeper coaches on low-occupancy routes, conducting regular reviews of reservation quotas, and expanding the Alternate Train Facility Scheme referred to as Vikalp.” The report states that the projected passenger revenue for the year 2024-25 is set at Rs 80,000 crore, whereas the estimated freight revenue is Rs 1,80,000 crore. The committee is of the opinion that boosting the net revenue of Indian Railways hinges primarily on enhancing its earnings from the passenger segment.
The Parliamentary Standing Committee on Railways noted that it understands Indian Railways serves as the primary transport system for millions of impoverished individuals in the nation, and due to its social service responsibilities, it faces losses by offering fares that are lower than the actual cost. Nonetheless, the committee is of the opinion that Indian Railways must thoroughly assess its passenger fares for different trains and classes.
Train travel getting more expensive?
The committee is of the opinion that travel in ‘General Class’ must stay accessible for the average person, while also urging Indian Railways to assess its earnings from AC class and connect them with the expenses involved to minimize losses in the passenger class. The committee further encouraged Indian Railways to thoroughly assess its operating costs for passenger trains and ensure its ticket prices are reasonable.