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Competition from roadways dampens Indian Railways revenues

There has been an increase in rail freight earnings YoY, but not as expected. Indian Railways is facing stiff competition, in terms of freight movement, from roadways; even inland waterway routes are emerging as a strong contender.
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The mismatch between actual and expected railway freight earnings has been noted in previous years too. In FY23, earnings were recorded at ₹1,62,262.90 crore, about 2 per cent lesser than the estimated ₹1.65 lakh crore. Budget and revised estimates were the same.

Coal loading remains the biggest revenue source in the railway freight segment, contributing about 50 per cent or ₹82,905 crore. Other key cargo include cement, pig iron, iron ore, food-grains, fertilisers, petroleum and other lubricants, and containers. The share of these items is expected to remain unchanged during FY25.

At ₹1.8 lakh crore, the anticipated freight earnings in the current fiscal is almost on par with the Budget estimates (BE) last year at ₹1,79,500 crore. To compare, FY24 freight earnings were revised to ₹1.69 lakh crore, 6 per cent lower than BE. It is also only about 4 per cent higher year-on-year.

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