Prachee Mishra

prachee@prsindia.org
Mandira Kala
mandira@prsindia.org

July 8, 2014
PRS Legislative Research Institute for Policy Research Studies
3
rd
Floor, Gandharva Mahavidyalaya 212, Deen Dayal Upadhyaya Marg New Delhi 110002
Tel: (011) 2323 4801-02, 4343 4035-36
www.prsindia.org
Vital Stats
Functioning of the Railways
The Minister of Railways, Mr. D.V. Sadananda Gowda, presented the Railways Budget 2014 to Parliament
on J uly 8, 2014. In his address, he commented on the performance of Railways in 2013-14 and laid out his
budget proposals for 2014-15. In this context, we present some statistics on the functioning of the
Railways.
Cross subsidisation of passenger traffic by freight has increased
Source Railways Budget documents, Railways Annual Report, PRS
Freight traffic volume grew by 67% in the last 10 years while passenger traffic volume grew by 94% in the last 10 years.
Freight earnings have consistently been around 67% of the total Railways revenue in the last 10 years. Passenger earnings
have been around 27% of the total Railways revenue.
While passenger traffic has grown faster than freight traffic, the relative share in earnings has remained the same. This
implies that the cross subsidy by freight has increased.
India has a low passenger fare to freight rate ratio

Source White paper on Indian Railways
In many countries, passenger fares are either higher or
almost equal as freight rates.
However, in India, the ratio of passenger fare to freight
rate is about 0.3.
This also suggests that freight earnings significantly cross
subsidizes passenger fares in Indian Railways.
10%
5%
0%
5%
10%
15%
2
0
0
5
-
0
6
2
0
0
6
-
0
7
2
0
0
7
-
0
8
2
0
0
8
-
0
9
2
0
0
9
-
1
0
2
0
1
0
-
1
1
2
0
1
1
-
1
2
2
0
1
2
-
1
3
2
0
1
3
-
1
4
2
0
1
4
-
1
5

B
E
Volumegrowthforfreightandpassenger
%Growthinfreightvolume %Growthinpassengervolume
0%
10%
20%
30%
40%
50%
60%
70%
80%
2
0
0
4
-
0
5
2
0
0
5
-
0
6
2
0
0
6
-
0
7
2
0
0
7
-
0
8
2
0
0
8
-
0
9
2
0
0
9
-
1
0
2
0
1
0
-
1
1
2
0
1
1
-
1
2
2
0
1
2
-
1
3
2
0
1
3
-
1
4
2
0
1
4
-
1
5

B
E
Revenueshareforfreightandpassenger
Freightearnings(%oftotalrevenue)
Passengerearnings(%oftotalrevenue)
1.4
1.3
1.2
1.1
0.9 0.9
0.7
0.4
0.3 0.3 0.3
0.2
0.1 0.1
Ratioofaveragepassengerfaretoaverage
freightrates

Functioning of the Railways PRS Legislative Research

July 8, 2014 - 2 -

Share of Railways in Total Freight Traffic has declined

Source NTDPC India Transport Report
The share of Railways in total freight traffic has declined
from 89% to 30% over the last 60 years.
A steady increase in freight rates for Railways has led
loss of freight traffic to roads.
In the last decade, some of the freight traffic has shifted to
other modes of transport such as airways and waterways.
Infrastructure investment is directed more towards Roads, less towards Railways

Source NTDPC India Transport Report
The gradual decrease in the freight share of Railways
can also be attributed to the decrease in investments in
the sector.
Roads have consistently received a larger chunk of the
infrastructure investment.
Railways receives most of its funding from the public
sector. In comparison, roads receive investments from
both public and private sectors.
The 12
th
Five Year Plan proposes to encourage private
investments in Railways.
Number of accidents has declined in the last 10 years

Source: Railways Budget documents

The number of rail accidents has declined from 325 in
2003-04 to 131 in 2011-12.
The share of failure of railways staff contributing to rail
accidents has declined steadily.
The number of sabotage cases causing rail accidents has
increased in the last few years.
This suggests that while Railways is slowly improving
its internal efficiency, it needs to work towards
improving general safety and security of the services.


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0%
20%
40%
60%
80%
100%
1950-51 1978-79 1986-87 2007-08
ShareofTotalFreightTraffic
Railways Highways Others
0
5000
10000
15000
Public Private Public Private Public Private
10thFYP 11thFYP 12thFYP
Infrastructureinvestmentbypublicandprivate
sectors(inRsBillion)
Roadsandbridges Ports Airports Railways
325
234
234
195
194
177
165
141
131
0
50
100
150
200
250
300
350
2
0
0
3
-
0
4
2
0
0
4
-
0
5
2
0
0
5
-
0
6
2
0
0
6
-
0
7
2
0
0
7
-
0
8
2
0
0
8
-
0
9
2
0
0
9
-
1
0
2
0
1
0
-
1
1
2
0
1
1
-
1
2
Numberofaccidentsduetovariousfactors
Failure of Railway staff Failure of other than Railway staff
Failure of equipment Others
Grand Total