6% rise projected in loading of goods, experts call for focus on bottlenecks
Mamata Banerjee did not tinker with freight rates, but brought down the projected earnings from “unrealistically high targets set in the interim budget”.
For 2009-10, she has budgeted freight earnings at Rs 58,525 crore, a rise of 7.8 per cent over the revised estimates of Rs 54,293 crore in the previous year. This growth in freight earnings is half of what the railways had witnessed in 2008-09. Earnings from goods constitute about 66 per cent of Indian Railways’ total revenue.
Experts said the target is feasible. “There are signs of recovery in the economy. There are about nine months left for the fiscal to end. The target is achievable,” said Vishwas Udgirkar, executive director, PricewaterhouseCoopers.
“No increase in freight tariffs is also positive for many core sectors like steel, cement,” said Gaurav Dua, head — research, Sharekhan Ltd.
The impact of the economic slowdown was evident in the freight numbers. Freight loading fell short of the target of 850 million tonnes set for 2008-09 and stood at 833 million tonnes.
Blaming the “economic slowdown” for the less freight carried in 2008-09, Banerjee did not miss the chance to take potshots at former railways minister Lalu Prasad, who had presented the interim budget in February 2009. “This has forced me to review the targets set for 2009-10 in the Interim Budget. Based on the review, it is very clear that the unrealistically high targets in the Interim Budget are not sustainable and warrant a mid-course correction,” she said.
For 2009-10, the freight loading target has been kept at 882 million tonnes, a rise of 5.9 per cent over the revised 2008-09 figures. Banerjee expects the counter-cyclical measures taken in the three stimulus packages will help the railways to attract more bulk traffic and new traffic streams.
For 2008-09, revised freight earnings were up by 3 per cent, compared to the budgeted estimate of Rs 52,700 crore for the same year. This increase came in spite of the slowdown in the Indian economy seen in the second half of 2008-09.
With demand in domestic and overseas markets remaining weak, earnings growth in 2009-10 through carriage for export cargo as well as domestic movement of goods, across the sectors, will remain at levels lower than the previous year. Earning from iron ore cargo meant for exports is expected to dip by 7 per cent in 2009-10. However, revenue from coal is expected to remain buoyant, as in the previous years.
In a move to improve freight traffic collections, Railways will be striving to increase its share in traffic streams like automobiles and fly ash. However, no road map was given on the strategy to tap these new sources of revenue.
Other measures include permission for container carriers to access private sidings, a premier container service with assured time limit, private operation of freight terminals and private multi-modal parks.
According to experts, the rate of increase in rail earnings seems to be plateauing. “The focus of the railways now should be to free up the bottlenecks so that the system has more capacity,” said Udgirkar.
