New Delhi: The railways minister Lalu Prasad Yadav said on Thursday the revenue of the Indian railways has taken a hit in October because a slowdown in the economy led to a drop in freight income,
“The decline in railways freight earnings is attributable to a slackening of market demand for transportation in the present environment of economic downturn,” the railway minister, told the Parliament.
He also said revenue growth of the railways slowed to 6.52% in October from 19.31% in the same month last year.
In a written reply, he said during October, earnings from freight which constitutes bulk of railway revenue earnings dipped to single digit at 4.91% compared to the corresponding month of last year.
In April-October period, Indian Railways’ earnings mainly from passenger and goods traffic, however, rose by 15.76% year on year, and stood at Rs44,548 crores.
Industrial output fell 0.4% in October from a year earlier, as firms cut production to prevent inventory build-up. Exports have also declined by 12%, the first monthly fall in nearly 3 years on falling overseas demand.
Earnings of railways will be hurt in 2008-09 as economic growth is expected to slow to about 7% from 9% in previous year.
The railway ministry on Thursday sought parliamentary approval to spend Rs1700 crores over the budgeted Rs29,939 crores in FY09 for completion of ongoing projects.
The parliament in October had approved Rs527 crores of extra spending, taking the total surplus to Rs2,227 crores.
To counter the effect of the slowdown on financial health of railways, the ministry has taken a number of steps to boost demand for transportation, said Prasad.
“These include freight discounts of up to 40% on short lead cement traffic and distance-based freight concession of up to 50% on iron-ore traffic for export,” he added.