Every tonne cargo earns less

RAILWAY BUDGET

Freight earnings, the mainstay of railways, has failed to impress this financial year.

The interim Budget announced yesterday has revised the freight revenue target for 2003-04 to Rs 27,115 crore, 2.5 per cent (Rs 700 crore) short of the initial target of Rs 27,815 crore.

The poor performance is surprising in the backdrop of an expected 8 per cent economic growth and the higher load the railways was expected to carry during the financial year.

The railways have estimated to have hauled 10 million tonnes additional freight during the year compared with the Budget estimate of 540 million tonnes.

Shortly after presenting the interim Budget, Railway Minister Nitish Kumar admitted that the yield per million tonne (MT) this year had been very disappointing.

Against a Budget target of Rs 51.50 crore, each MT of freight hauled during the first three quarters of the fiscal yielded only Rs 49.55 crore.

He, however, expressed the hope that the financial year would close with figures more cheery than the revised estimates.

Kumar said the benefits of freight rationalisation undertaken over the past two years would materialise over a couple of years.

Financial Commissioner Vijayalakshmi Vishwanathan said the decline in the average lead -- the distance over which freight is hauled -- was a prime reason for poor freight earnings this year. "In 2003-04, the average lead has dropped from 694 km to 684 km," she said.

Vishwanathan added that a change in product mix in the freight hauled during the year also resulted in lower earnings.

"In the initial stages, we moved more foodgrains where the Railways earn less," she said. Further, bulk discount to the POL and other major clients also ate into our bottomline, she added.

The passenger earnings target for the financial year has also been scaled down by Rs 160 crore to Rs 13,460 crore. For 2004-05, an ambitious target of Rs 14,200 crore has been set.

Coaching earnings are also likely to end the year Rs 90 crore short of the initial target of Rs 1,020 crore. The only head under receipts which is likely to exceed the budget expectation is sundry earnings which is expected to rake in Rs 1,050 crore (higher by Rs 60 crore).

Overall, the revised estimates present a Rs 890 crore shortfall in earnings.

The poor show on the revenue front will mar the savings of Rs 1,490 crore expected in ordinary working expenses this financial year. The railways also expect to clear traffic suspense (unrealised earnings) worth Rs 50 crore this year, while next year's target is Rs 80 crore.

The revised gross traffic receipts for 2003-04 are Rs 42,605 crore against the Budget estimate of Rs 43,495 crore. This is 3.7 per cent higher than the traffic receipts of the previous financial year. The next year's target is Rs 44,482 crore.

He told reporters after presenting the interim budget that the reclassification of distances and the freight rate rationalisation undertaken in the last budget, has led to a drop in earnings for a large number of commodities.