Railways seeks to boost internal revenue in post-pandemic push
1 min read . Updated: 24 Jan 2023, 06:30 AM IST
PremiumIndian Railways’ internal revenue generation has been hit over the years, bringing down actual realisations against the budgeted levels.
NEW DELHI : Having failed to increase internal revenue generation in the last three years, Indian Railways proposes a mega-push to raise its fare and non-fare revenues in FY24 based on first assessment of earnings in largely covid-free FY23.
According to two people privy to the development, the national transporter proposes to set a high target of ₹10,000 crore through internal generation in FY24.
In doing so it is pinning its hopes on a second covid-free year boosting passenger and freight earnings. Alongside, a monetisation exercise involving commercial use of its airspace and vacant land is expected to raise its non-fare revenue.
“Expecting that 2022-23 would be a normal year free from covid impact with passenger traffic returning to pre-covid level with reasonable growth and based on its highest-ever freight loading target of 1,475 MT, Railways have estimated an internal resource generation of ₹7,360 crore in BE 2022-23 (out of total capex of about ₹2.45 trillion).
Monetization, which could not take off due to the covid impact during 2020-21 and 2021-22 would also be taken forward now aggressively now," said one of the two people quoted above.
“The focus will to prioritise accomplishing and commissioning remunerative projects, high-priority works and accelerate their commissioning. All will raise Railways’ internal revenue generation reducing its dependence on government budget and market borrowings," he added.
Queries sent to ministry of railways remained unanswered.
Indian Railways’ internal revenue generation has been hit over the years, bringing down actual realisations against the budgeted levels. Railways’ capacity to generate internal resources was hampered in 2016-17 and 2017-18 due to a sharp increase in staff costs and pension expenditure following the implementation 7th Central Pay Commission without commensurate growth in traffic revenue.
With stabilization of working expenses and picking up of railway revenue, the year 2018-19 saw some improvement in internal resource generation. But the covid-19 pandemic led to less-than-projected revenue generation. Railways’ capacity to generate internal resources was severely hampered in 2019-20, 2020-21 and 2021-22.
In FY20, the actual generation of internal resources of the Railways was only ₹1,685.09 crore, 33% of the revised estimate of ₹5000 crore. Similarly, in 2021-22, the actual realisation remained ₹1,422.95 crore against the RE of ₹2,500 crore.
