If the performance of cash-short Indian Railways (IR) in the first two months of financial year 2014-15 is an indicator of the remaining year ahead, the freight business would bring some respite but falling passenger volume will continue to worry.

Freight volume grew about five per cent for April-May but passenger volume fell 1.3 per cent over a year before for the two months. A fare rise helped IR to register a growth of Rs 890 crore in passenger revenue but passenger volume fell 18 million for the two months.

There was six per cent growth in loading compared to the four per cent in the first two months last year. Goods earnings grew about six per cent, adding an extra Rs 900 crore. Senior officials said in a slowing economy, the increase in loading capacity was mainly due to efficient operations, use of empty wagons and better planning. “The increase was not because of any macro economic factor but we have registered a consistent hike in the top five commodities,” said a senior IR official.

In 2013-14, it was a similar story of higher freight earnings and lower passenger volumes, though a fare rise of 15 per cent since 2013 helped keep revenue afloat. It was after a span of five years when IR surpassed its revised budget loading targets and exceeded its goods earnings benchmark. On the other hand, the passenger volumes fell, year-over-year, for the first time in decades.
In its revised budget target, IR had expected an operating ratio (cost over earnings) of 90.8 per cent and senior officials say it is likely to be only a few few decimal points below the target, despite robust performance on freight.

IR carried 1,053 million tonnes of freight in financial year 2013-14, one mt higher than the revised budget target and about 10 mt more than its initial budget target, also surpassing its revised goods earnings target by Rs 925 crore.

While the freight side improved volumes with efficiency, the fall in passengers has been a source of concern and affected the earnings, which have shown no significant improvement despite fare rises.

IR expected a rise of 5.2 per cent in its traffic last year but the volumes dropped about one per cent and the earnings trailed by Rs 4,700 crore compared to the budget estimates; it was even short of Rs 22 crore compared to the revised budget target, which was much lower than the initial one.

Experts said while the good performance on freight side is attributed to the overall efficient management and use of various innovative methods like using rail-cum-sea link for many routes to reduce distance, the falling passenger volumes have been the object of guesswork. Some attribute the fall to ticketless travelling, others to the speedy expansion of roads and airways.