Lok Sabha Question No. 454 (STARRED), answered on 2017-04-05
Subject: Earnings of Railways
Ministry: RAILWAYS
Asked by: KIRIT PREMJIBHAI SOLANKI

## GOVERNMENT OF INDIA MINISTRY OF RAILWAYS

## LOK SABHA STARRED QUESTION NO. 454

## TO BE ANSWERED ON 05.04.2017

## EARNINGS OF RAILWAYS

- *454. DR. KIRIT P. SOLANKI:

Will the Minister of RAILWAYS  be pleased to state:

- (a) whether the total earnings of Railways from goods and passengers  have  substantially  declined  as  against  the  target and if so, the details thereof along with the revenue generated during  the last three years, year-wise;
- (b) the reasons behind such a decline and steps taken to perk up the earnings;
- (c) whether  the  reduction  in  revenue  collection    has  had  any adverse impact on any of the Railways activities and if so, the details thereof and the action taken to address the same; and
- (d) whether the introduction of a flexi-fare system and rationalisation of freight rates have improved the fiscal deficit and if so, the details thereof?

## ANSWER

## MINISTER OF RAILWAYS

(SHRI SURESH PRABHAKAR PRABHU)

- (a) to (d) A Statement is laid on the Table of the House.

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STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (d)  OF STARRED  QUESTION  NO.454  BY  DR.  KIRIT  P.  SOLANKI  TO  BE ANSWERED IN LOK SABHA ON 05.04.2017 REGARDING EARNINGS OF RAILWAYS

- (a) Based  on  approximate  figures  available,  passenger  earnings  for 2016-17 are estimated to be around ` 48000 crore (same as revised estimates target) which is higher than last year's actuals of ` 44283 crore.

Based on approximate figures available, Goods  earnings are estimated  to  be ` 105000  crore  against  the  RE  target  of ` 108900 crore.

Taking into account earnings under other heads like sundries, other coaching etc, total earnings in 2016-17 is estimated to be ` 167000 crore as against ` 163791 crore achieved during 2015-16.

The revenue generated by Indian Railways from Goods and Passengers during the last three years is as under:-

( ` in Crore)

|                    |   2013-14 (Actual) |   2014-15 (Actual) |   2015-16 (Actual) |
|--------------------|--------------------|--------------------|--------------------|
| Goods Earnings     |            93905.6 |           105791   |           109208   |
| Passenger Earnings |            36532.2 |            42189.6 |            44283.3 |

Note: figures of the preceding three completed years given as  above excluding 2016-17 for which the Accounts is not yet closed.

- (b) The reason for shortfall in goods earnings vis-a-vis revised target in 2016-17 is attributed to drop in average freight lead. Leads across all  the  commodity baskets, especially coal, have been decreasing as production centres have come closer to places of consumption resulting in drop in earnings.

Efforts  towards  maximizing  goods  and  passenger  earnings  are  as under:-

## Goods Earnings

Railway has initiated various freight rationalization measures  to increase growth rates in freight earnings. Some of these steps are as under:

- (1) Withdrawal of Port Congestion Charge from 13.04.2016.
- (2) Extension of Automatic Freight Rebate scheme for traffic loaded in empty flow direction upto 31.03.2017.
- (3) Withdrawal  of  Busy  Season  Charge  for  traffic  loaded  in  BCN group and BCNHL wagons w.e.f. 01.05.2016 till 30.06.2016.
- (4) Withdrawal of dual freight policy for iron ore w.e.f. 10.05.2016.
- (5) Re-introduction of short lead concession and reduction of minimum  distance  for  charge  from  125  km  to  100  km  w.e.f. 15.07.2016.
- (6) Rationalization  of  Coal  Tariff  has  been  done  with  reduction  in freight for long lead power houses w.e.f. 22.08.2016 and classification  of  Coal  has  also  been  reduced  from  Class-150  to Class-145.
- (7) BCN group permitted for two point booking and mini rake w.e.f. 15.03.2016.
- (8) Distance for mini rake increased from 400 km to 600 km w.e.f. 15.03.2016.
9. A  liberalized  policy  with  delegation  of  power  to  Zonal  Railways introduced for two point booking of covered wagons in which any two stations within a distance of 200 km in busy season and 400 km  in  lean  season  have  been  permitted  for  two  point  booking
- (9) w.e.f. 22.07.2016.

- (10) Rationalization of Merry-Go-Round (MGR) system w.e.f 01.04.2016,  which  has  led  to  reduction  in  freight  rate  to  the extent of 80%.
- (11) Proliferation of Roll-On Roll-Off (RORO) service launched on ECR from 25.05.2016 and subsequently on other Zonal Railways.
- (12) Permission to notify Group I and Group II station/goods sheds as CRTs for lift on-lift off operations w.e.f 12.07.2016.
- (13) Charging  of  commodities  for  transportation  by  containers  has been liberalized. 43 additional commodities de-notified for charging at FAK rates w.e.f 02.09.2016.
- (14) Guidelines for Station to Station Rate policy issued on 29.09.2016.
- (15) Class  of  various  commodities  have  been  rationalized  and  new commodities have been added in Goods Tariff.
- (16) Instruction for movement  of HSD  Oil in BTPN  rates from Numaligarh refinery siding (NRSR) to Parbatipur, Bangladesh has been issued w.e.f 13.03.2016.
- (17) The system of transportation to Bangladesh through 'Dump' and 'load adjustment' has been discontinued.
- (18) Withdrawal of levy of congestion charge for stone traffic transported from Eastern Railway to Bangladesh via Darsana/Benapole.
- (19) Weighment  of  Standard  Bagged  consignment  policy  has  been rationalized.
- (20) Discount  on  loading  of  bagged  consignment  in  open  and  flat wagons w.e.f 24.10.2016.
- (21) Policy  on  Long  Term  Contracts  with  key  freight  customers launched.

- (22) Proliferation of 25T axle load routes to increase throughput per train.
- (23) Encouraging  longer  lead  traffic  by  permitting  movement  from Talcher to Southern Power Houses through all rail routes.
- (24) Electronic Registration of Demands & Electronic Transmission of Railway Receipt.
- (25) Innovative policies to enhance the ease of doing business such as simplifying rules and procedures, efficient weighment system and shift to digital and e-based procedures  including  cashless payment system.
- (26) SAMVAD- A  process  of  structured  dialogue  between  customers and top Railway authority has been initiated at Railway Board as well as zonal level to take continuous feedback from customers. Ten  key  Customer  Managers  at  Railway  Board  level  have  been nominated to liaise with major freight stakeholders.
6. (27)
7. Introduction of time-tabled freight trains to attract traffic to rail.
8. (28)
9. Besides, following measures are being planned for 2017-18:
- i. New  delivery  models  like-  Running  of  double  stack  dwarf container   under-wire.
- ii. Expansion of freight basket.

Further  in  order  to  increase  the  earnings  of  Railways  in  freight transportation and to improve the efficiency of Freight Traffic specially for  non-conventional  traffic  in  high  capacity  and  special  purpose wagons,  the  following  schemes  have  been  introduced  by  Indian Railways for procurement of rakes for transportation of freight traffic by inviting private investment through Public Private Partnership (PPP):

- (i) Liberalized Wagon Investment Scheme. So far, approval for procurement of 68 rakes has been accorded to various customers   by  Ministry  of  Railways.  Out  of  these,  32 rakes  have  been  procured/inducted  and  are  running  on  the

system.

- (ii)     Wagon Leasing Scheme. Two

Companies have been registered as Wagon Leasing Companies under the policy. They have procured 12 rakes of BLC wagons and 1 BTAP rake and approval for 4   new  BLC,  1  BTAP and 6 BFNS (22.9t axle load) rakes has been accorded.

- (iii)     Special Freight Train Operators Scheme. So far, 3 rakes of BRNA wagons have been inducted and approval

for  procurement  of  3  rakes  of  BFNS  (22.9t  axle  load)  has  been given.

- (iv)    Automobile Freight Train Operators Scheme.

Under this scheme, License has been given to two companies to work as AFTO and they have procured 9 rakes till date.

Further, to facilitate rapid development of network of freight terminals with private investment to provide efficient and cost effective logistics services  with  warehousing  solution  to  end  users,  a  scheme  namely

Private Freight Terminal (PFT) has been introduced.

## Passenger:-

Initiatives taken to enhance passenger earnings include:

- (1) Attachment  of  additional  coaches,  running  of  special  trains during festivals and holidays, running of Suvidha trains, etc. for the convenience of passengers.
- (2) Organising  intensive  ticket  checking  drives,  including  fortress checks, etc to discourage ticketless travels.

- (3) Augmentation  of  ticket  selling  capacity  through  operation  of Automatic Ticket Vending Machines  (ATVM),  mobile  ticketing, utilising  the  services  to  ticketing  agents  like  Jan  Sadharan Ticket  Booking  Sewaks  (JTBS),  Station  Ticket  Booking  Agents (STBA), Yatri Ticket Suvidha Kendra (YTSK) etc.
- (4) Introduction  of  Alternate  Train  Accommodation  Scheme  known as VIKALP on pilot basis to  provide confirmed accommodation to wait-listed  passengers  in  the  alternate  trains  based  on  choice exercised by them and to ensure optimum utilisation of available accommodation.
- (5) Dynamic pricing has been implemented in Rajadhani, Duronto and Shatabdi Express trains.
- (6) Facility of booking tickets through internet has been strengthened for convenient booking of   reserved tickets and service charges on booking of e-tickets/i-tickets withdrawn upto 30.06.2017.
- (7) Facility of booking unreserved tickets through mobile phones has been provided on certain suburban sections of Central, Western, Eastern, South Eastern, Southern, South Central and nonsuburban section (Delhi-Palwal) of Northern Railway. The project is being expanded further to cover more sections/zonal Railways.
- (8) Facility of cashless transactions at PRS/UTS counters (including suburban)  through  POS  (Point  of  Sale)  machines  to  enable payment through credit/debit cards is being provided to   cover all PRS/UTS  locations.  An  arrangement  has  been  made  to  install 10000 POS machines   through State Bank of India.

- (c) The  decline in traffic earnings has no  adverse  impact on operation and maintenance of Railways activities. However, this has  impacted  generation  of  surplus  to  finance  Capex  thereby increasing  the  Railways  dependence  on  Ministry  of  Finance  for support.
- (d) Evaluation  of  various  alternatives  relating  to  rationalization  of passenger fare structure and freight rates is an on-going process. Recently, in case of new trains such as Humsafar and Antyodaya, due  to higher capital cost and  various additional facilities provided, dynamic fare structure has been introduced. In Humsafar trains, the fare has been fixed at 1.15 times the basic fare  of  AC  3-Tier  superfast  Mail/Express  for  the  first  passenger block  of  50%  and  thereafter  a  10%  increase  for  every  10% increase in the passenger block for the remaining 50%. The fares of  fully  unreserved  Antyodaya  trains  have  also  been  fixed  15% higher  in  base  fare  than  Mail/Express  trains.  The  additional earnings  generated  have  contributed  to  the  improvement  in overall reciepts position of the Railways.

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