Freight revenue subsidizes 65% of Indian Railways earnings, Standing Committee finds

Who it concerns: This concerns the Ministry of Railways (specifically Indian Railways) and the general public, including freight customers, industrial sectors, and passengers who rely on subsidized fares.

What the committee found

• The Committee recommended close monitoring of zone-wise revenue targets and offering discounted tariffs for zone-specific goods to attract freight traffic.
• It suggested leveraging data analytics for real-time dynamic discounts and exploring non-fare revenue through advertising on coaches and wagons.
• The Committee recommended an annual comprehensive assessment of freight rates, which have remained unchanged since November 2018, to ensure competitiveness with road transport.
• It urged Railways to assess future wagon requirements by taking inputs from dependent sectors and promote private wagon ownership to address shortages.
• To alleviate congestion, the Committee recommended accelerating infrastructure upgrades, expanding the network with additional lines, and adopting advanced signalling systems.
• The Committee recommended equipping all railway yards with modern facilities such as approach roads, solid platforms, and leak-proof roofs, and promoting Gati Shakti Cargo Terminals.
• It recommended a comprehensive assessment of capacity augmentation for coal transport routes and formulating targeted strategies to increase fly ash transport via rail, restricting it to specially designed wagons.
• The Committee advised diversifying the freight commodity basket to include automobiles, FMCG, and e-commerce to counter decelerating growth in coal and iron ore revenue.
• For DFCs, it recommended evaluating economic returns relative to investment, attracting private investment through commercially viable terms, and developing feeder routes for better connectivity.

Also in the document

• Freight revenue constitutes about 65% of Indian Railways’ earnings and subsidizes passenger travel.
• Freight rates have remained unchanged since November 2018 despite rising operational costs.
• In 2024-25, the average freight train speed on the conventional network was 23.8 km/h, compared to 37 km/h on Dedicated Freight Corridors.
• Coal contributes almost 50% to railway freight earnings.
• NTPC continues to rely on road transport for moving fly ash despite rail concessions.