Indian Railways eyes this novel scheme for big booster shot to revenues
Indian Railways has decided on a strategy to raise its cash flows by at least Rs 1,000 crore from each of its large customers by luring them to pay upfront their freight charges for the whole year and offering them in exchange fixed freight rates that won’t go up during the year
In order to meet its targets and reduce the gap between the revenue and expenditure, the Indian Railways has come up with a novel scheme to boost its revenues. The Indian Railways will offer its large customers to pay upfront their freight charges for the whole year and in exchange the national transporter will offer a fixed freight rate that won't go up during the year. The Indian Railways expect to raise at least Rs 1,000 crore from each of its large customers.
Railways also will reportedly allow companies to run their own private wagons on its track systems. It will ease demand for Indian Railways own wagons. The Indian Railways customers, who pay at least Rs 1,000 crore yearly as freight charges, would now be able to pay the same amount as advance payment at a freight rate applicable on the day of the agreement between the two parties under the Freight Advance Scheme, Railway board said in a circular.
Indian Railways transports bulk of commodities like coal, iron ore, foodgrains,petroleum products, and fertilizers.
Indian Railways needs to beefup revenue collection to meet its expenses that exceed revenue generation in recent times. The Indian Railways operating ratio crossed 100% limit at the end of February. A CAG report recently said Railways’ spending-income gap this year was highest in last 18 Years.
Under the General Purpose Wagon investment Scheme, private as well as public sector customers of the Indian Railways can get their own wagons.
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Rebate of 10% will be provided on base freight rate on each loaded wagon procured by Indian Railways customers for a period of 15 years. These wagons reportedly would be in different colour and would move on specified routes.