Economic Survey: Indian Railways must focus on non-fare sources to increase earnings

BT Online        Last Updated: August 11, 2017  | 15:56 IST
Indian Railways doesn't need to increase fares to earn more

Indian Railways does not need to increase passenger fares to overhaul its earnings. According to the Economic Survey 2016-17 released today, Indian Railways should lay more emphasis on non-fare sources. The survey, authored by Chief Economic Adviser Arvind Subramanian, suggested that Railways should focus on renovating stations and take commercial advantage. The survey also advised leasing Railways' land near railway tracks.

"Railways should go for more non-fare sources along with station redevelopment and commercially exploiting vacant buildings at the station, monetizing land along tracks by leasing out to promote horticulture and tree plantation, and through advertisement and parcel earnings," the survey said.

Prime Minister Narendra Nodi-led government is planning a massive makeover to the Indian Railways with an investment of Rs 5 lakh crore. The redevelopment plan under Railways Minister Suresh Prabhu, with support of private and public investment, hopes to significantly increase passenger and freight volumes, lay down more tracks and introduce new trains.

But, there are many challenges. According to a Reuters report in May, Indian Railways missed earnings targets for the third straight year. The report said that revenues were insufficient to cover expenditure, and funding via market borrowing rose to about 22 per cent last year from an average of 8 per cent between 2010-15. The Railways now owe USD 20 billion, up USD 7 billion in the last three years.

Meanwhile, the Railways recently disclosed that it had earned an additional revenue of Rs 540 crore in less than a year through the flexi fare scheme. The scheme, launched on September 9 last year, is applicable in Rajdhani, Shatabdi and Duronto trains, allowing 10 per cent of the seats to be sold at normal fare and thereafter increasing it by 10 per cent with every 10 per cent of berths sold with a ceiling of 50 per cent.


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