 "Dismal freight growth takes sheen off tall Rail Budget claims")
Indian Railways has reported a dismal 1.2 per cent growth in freight tonnage in the first two months of the current financial year, clocking an incremental volume of a mere 2.2 million tonne (MT). This trend does not seem to support rail minister Suresh Prabhu’s tall claims made in the budget of transporting 85 MT extra freight in 2015-16.
Fresh data obtained from the ministry of railways show Indian railways carried 182.72 MT of freight in April and May compared to 180.52 MT in the same two months last year. The ministry did not share details of commodity-wise freight carried but the subdued freight volumes point at a delayed revival in the transport of coal and iron ore, two largest commodities in railways’ freight basket.
While presenting the Rail Budget in February, Prabhu had announced that the railways was budgeting for freight traffic to grow from 1,101 MT in 2014-15 to 1,186 MT in 2015-16 — an incremental volume of 85 MT against an average 50 MT incremental tonnage loaded annually in the past few years. Of the additional 85 MT tonnage, 42 MT was to come from coal, the largest component of railways commodity traffic basket, 9 MT extra from iron ore and 7 MT from cement traffic.
“For the first time in its history, Indian Railways is attempting an annual incremental growth in freight tonnage of 85 MT compared to 50 MT additional freight growth every year in the past,” Railway Board Chairman A K Mital had told Business Standard in a post-budget interview. Later, Member-Traffic Ajay Shukla had explained in a separate interview to Business Standard that the tall target was based on an expected 8-9 per cent GDP growth and increased coal traffic as a result of the e-auction of blocks.
Fresh data obtained from the ministry of railways show Indian railways carried 182.72 MT of freight in April and May compared to 180.52 MT in the same two months last year. The ministry did not share details of commodity-wise freight carried but the subdued freight volumes point at a delayed revival in the transport of coal and iron ore, two largest commodities in railways’ freight basket.
While presenting the Rail Budget in February, Prabhu had announced that the railways was budgeting for freight traffic to grow from 1,101 MT in 2014-15 to 1,186 MT in 2015-16 — an incremental volume of 85 MT against an average 50 MT incremental tonnage loaded annually in the past few years. Of the additional 85 MT tonnage, 42 MT was to come from coal, the largest component of railways commodity traffic basket, 9 MT extra from iron ore and 7 MT from cement traffic.
“For the first time in its history, Indian Railways is attempting an annual incremental growth in freight tonnage of 85 MT compared to 50 MT additional freight growth every year in the past,” Railway Board Chairman A K Mital had told Business Standard in a post-budget interview. Later, Member-Traffic Ajay Shukla had explained in a separate interview to Business Standard that the tall target was based on an expected 8-9 per cent GDP growth and increased coal traffic as a result of the e-auction of blocks.
Despite the lower volumes, railways freight earnings in April rose 17.2 per cent to Rs 9,461 crore against the Rs 8,071 crore recorded in the same month last year, indicating how the transporter is benefitting from the substantive rise in freight rates implemented over the past two years. Freight earning figures for May were not available.
The rail ministry had raised freight rates by 5.8 per cent in April 2013, 1.7 per cent in October 2013 and 6.5 per cent in June 2014.
Also, a congestion surcharge of 10 per cent is being levied on all goods traffic including containers originating from ports since November 2014. Rail minister Prabhu had hiked freight rates by an average 3 per cent across commodities in the Rail Budget, which is expected to fetch Rs 4,000 crore extra for railways in 2015-16.