The Curious Case Of Loss-Making Railways

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The Curious Case Of Loss-Making Railways

| Updated: November 25, 2023 17:26

It’s a widely known fact that Indian Railways is a hugely loss-making organisation. Its reluctance to hike ticket rates beggars belief. When then Indian Railways bleeds losses without doing anything about it.

According to The Print, a political storm could erupt if the Railways hike up ticket rates since the body is dedicated to social service.

To survive, the Railways, the media outlet reports, categorise a train from express to superfast or cut down on the number of coaches for cheaper classes and offer more coaches for higher categories.

Not that such decisions convince the masses. The Railways continue to bleed losses, despite the demand for rail travel exceeding supply.

The body is focusing on new freight corridors but not as much on increasing passenger transport capacity. The Print adds that despite freight traffic growing 40% in a decade, passenger traffic has been stagnant. It’s fractionally lower this year as opposed to that a decade back.

Further, the Railways increase freight rates for the transportation of goods. This is supposed to explain why the Railways have lost out on the goods traffic that goes by road; as of now, they only make up 25% of the total, and nearly all of that is made up of bulk commodities like coal and iron ore, The Print report outlined.

Perhaps inflated tariffs played a part, but even at the current rates, rail freight is typically less expensive than road freight. The organisation’s focus on providing end-to-end services and its commercial orientation remain the core issues.

Since its annual revenue of Rs 2.65 trillion is roughly equal to expenditures, the majority of the massive investment that is currently underway has to be financed by borrowing, the report adds.

It needs, as the article says, transformative investment for better speed, service and haulage capacity. A new business plan and pricing plan are long due.

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