Covid-19 puts break on Indian Railways earnings: National transporter staring at 72% fall in passenger revenue in FY21

The railways is poised to incur a 72% year-on-year slump in its earnings from passenger fares to only ₹15,000 crore this fiscal year, thanks primarily to a Covid-induced pan-India lockdown.

“Last year, the passenger revenue was around ₹ 53,000 crore. At this point, we have earned around Rs 4,600 crore, down 87%. In the passenger segment we will earn less, around Rs 15,000 crore in FY21,” Railway Board chairman and chief executive VK Yadav said on Friday at a virtual press meet to unveil the draft National Rail Plan 2030. Budget 2020-21 estimates had pegged earnings from passenger business at ₹61,000 crore.

However, the freight segment of the railways has been showing signs of a recovery since August, despite Covid-19 related disruptions. Freight revenue is the mainstay of the railways’ internal receipts, and it continues to cross-subsidise the passenger segment.

“Freight loading is now almost 97% of last year’s achievement and going by this trend, we expect revenue and loading to surpass last year’s tally,” said Yadav. The railways handled 1,210.46 mt of freight in FY20 with freight receipts at Rs 1.23 lakh crore in FY20.

Passenger operations of the railways were disrupted in March as the government suspended all economic activities to contain Covid-19. Services have been restored partially, in a graded manner since May, with the easing of the lockdown. Currently, the railways are running about 5,100 trains, including 1,089 mail express trains and 3,696 suburban train services. Ruling out full normalisation of passenger operations, with fear and caution still high on Covid-19, Yadav said occupancy was quite low at 30-40 % of these trains. Efforts were on to move towards normalcy in a phased manner, assessments were being done with various state governments on demand for rail travel and trains were being provided in such places, Yadav added.

In the longer term, the national transporter is looking at the ‘National Rail Plan 2030’ as a strategy to augment infrastructural capacity, increase transit time of freight substantially by increasing average speed of freight trains from present 22 kmph to 50 kmph and reduce overall cost of rail transportation by nearly 30%. This plan is being circulated among various ministries for their views and is expected to be finalised by January 2021. The objective of the plan is to create capacity ahead of demand by 2030, which in turn would cater to growth in demand right up to 2050. The aim is also to enhance the modal share of the railways from the current 27% to 45% in freight by 2030 as part of a national commitment to reduce carbon emission and to continue to sustain it.

As an important component of the National Rail Plan, Vision 2024 lays out the railways’ strategy to enable freight loading of 2024 MT by 2024 through expansion of infrastructure capacity. The blueprint involves multi-tracking of 16,373 km, which includes 58 super critical projects (3750 km), 68 critical projects (6913 km), 46 projects on high density networks and highly utilised networks (3262 km) and 32 other essential projects (2448 km) by 2024. The railways are also targeting 20 additional coal connectivity projects (2,184 km), 146 railway electrification projects (23,800 km), 120 traffic facilities, including development of passenger terminals, 686 signaling and telecommunication works as well as North-East connectivity projects (288 km) among others.