FREIGHT: For 2009-10, the target is Rs 59,059 crore.
Indian Railways on Friday projected an 8.7 per cent increase in freight earnings for 2009-10, despite the global economic downturn adversely affecting many domestic industries that use the rail network to transport their raw materials and finished products.
In the Interim Railway Budget presented to Parliament on Friday, Railway Minister Lalu Prasad did not tinker with the freight rates and instead assured better services to customers.
However, in the current fiscal, the railways have revised upwards their earnings from goods traffic. They now expect freight earnings to grow 14 per cent as against the earlier projection of 11 per cent.
This is despite acknowledging a slowdown in goods transport in October-November 2008. “The situation in December 2008 and January 2009 indicates some improvement and we are not only hopeful but also confident that the Budget targets for goods earnings set for the fiscal will be surpassed,” the minister said.
India’s economy is projected to grow at 7.l per cent in 2008-09, substantially lower than the 9 per cent-plus growth for the previous three financial years.
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But analysts say the Indian Railways will be able to meet its target, as its freight earnings grow faster than the GDP rate. “Non-reduction of freight rates will help it achieve the revenue target for next year. Even if the economy grows by 5.5-6.5 per cent in the next fiscal, the railways’ targets will be achieved as there will be enough demand for key goods it transports — coal, iron and steel and fertilisers,” said Amrit Pandurangi, leader (transportation and infrastructure), PricewaterhouseCoopers.
The railways have projected an 8.7 per cent increase in freight earnings for 2009-10 at Rs 59,059 crore, which is an optimistic outlook as the economy is expected to grow around 7 per cent during the period. Freight earnings in the current fiscal are estimated to grow at 14.4 per cent at Rs 54,294 crore.
Freight loading is expected to increase 7 per cent at 910 million tones (MT) in the 2009-10 fiscal, compared with 850 MT in the current fiscal. Freight traffic grew by 9 per cent in 2007-08 and is expected to grow by 7 per cent in 2008-09.
The estimate of freight earnings for the current fiscal was raised by 3 per cent to Rs 54,293 crore from the Budget estimate of Rs 52,700 crore, despite freight movement in October and November 2008 was adversely impact by the economic slowdown. There was a steep reduction in iron ore for export and container traffic. The growth rate of steel traffic also declined.
Freight earnings in April-December 2008 increased by 14 per cent at Rs 38,093 crore. “Based on the present trend, we have increased the targets for goods earnings for 2008-09 by Rs 1,593 crore,” the railway minister added. The freight loading target for the current year was retained at the Budget estimate of 850 MT.
In the last five years, the railways have stepped up the annual growth rate of freight loading from an average 3 per cent during the 1990s to an average of 8 per cent, which helped the public sector behemoth to wrest some market share in transportation of steel and cement sectors.