Indian Railways (IR) plays a monumental role in India’s economic development. Its significance is not limited to its function as the country’s primary mode of transport but extends much further. The railways have a wide-reaching influence on areas such as manufacturing, services, government revenue collection, and employment generation. Yet, despite these contributions, the IR has been grappling with various organizational and financial challenges. This article aims to shed light on these concerns and provide viable suggestions for improvement.
Rising Debt and the Struggle for Financial Stability
The Indian Railways has been dealing with increasing debt. With the lack of surplus funds, it has resorted to heightened funding through tools like Gross Budgetary Support (GBS) and Extra Budgetary Resources (EBS). However, this approach accompanies a hefty price. Expense towards repayment of principal and interest claims 17% of IR’s revenue receipts, which indicates a worrying leap from less than 10% till 2015-16.
Declining Share in Key Commodity Transportation
Over the years, IR has experienced a significant decrease in its share of transporting pivotal commodities. Dramatically, coal transportation by rail decreased from 70% in 2011 to 60% in 2020, despite coal consumption rising during the same period. The share of exim (Export-Import) containers oscillated between 10% and 18% from 2009-10, reaching only 13% in 2021-22.
Challenges with Net Tonne Kilometres (NTKM)
The Indian Railways witnessed an alarming decline in NTKM by 4% and 5% respectively in 2015-16 and 2016-17. Furthermore, the NTKM annual growth rate recorded between 2015 and 2022 was merely 3.5%, which pales in comparison to the road transport sector’s growth rate.
Concerns Regarding Financial Performance and Freight Business
The IR currently operates against a backdrop of financial imbalance. While its freight segment generates profits, the passenger segment accrues massive losses, as highlighted by a Comptroller and Auditor General of India (CAG) report from 2023 showing a loss of Rs. 68,269 crore. Additionally, the railways’ share in India’s freight business has drastically shrunk to approximately 27% from over 80% at the time of independence.
Inefficiencies of Cargo Division and Rising Competition
Internal inefficiency presents itself through the artificial division of cargo into goods and parcels, which hampers overall productivity. Coupled with growth outpaced by road transport and fluctuating NTKM, the competition for the railways rises significantly. Moreover, after fifteen years of privatization, containerized domestic cargo makes up only 1% of IR’s loading and just 0.3% of India’s total freight.
Strategies for Improving Cargo Transport
Several interventions could aid in enhancing cargo transportation by the railways. Phasing out parcel trains, offering greater flexibility to shippers, overcoming challenges in cargo transportation, ensuring a level playing field, optimizing tariffs, modernizing infrastructure, and reducing operational costs are among these recommended strategies.
Initiatives to Amplify Bulk Cargo Transportation
The Indian Railways has introduced several initiatives like relaxing block rake movement rules, allowing mini rakes, and launching private freight terminals (PFTs). Government-backed policies such as PM GatiShakti (PMGS), aimed at establishing an uninterrupted multi-modal transport network, and the National Logistics Policy (NLP), focusing on constructing a national logistics portal, have also been implemented to bolster the bulk cargo sector.
Need for Infrastructure Investment and Dedicated Freight Corridors
The government has rolled out schemes such as ‘Sagarmala’ for port-led development and ‘Bharatmala’ for road expansion. These need to be integrated with the railways. Furthermore, leveraging ‘Dedicated Freight Corridors’ can increase freight transportation.
The Role of Bio-toilets in Indian Railways
As part of its efforts towards sustainable development, the Indian Railways has also integrated bio-toilets into its facilities. However, misconceptions exist regarding their operation and end products, which require clarification for informed usage by passengers.