Indian Railways to join billion-dollar cargo club soon: Suresh Prabhu

Railway Minister Suresh Prabhu on Tuesday exuded confidence that the national transporter will soon join the billion-dollar cargo club as it is on course to ferry 1.2 billion tonnes of cargo.

"Railways is targetting to carry 1.2 billion tonnes of cargo this year and will be join the billion-dollar cargo club soon, which has only five countries," Prabhu said at the SBI Economic Conclave in Mumbai on Tuesday.

The Minister said this is despite that decades of underinvestment in improving capacity. "From 90% of Railways' finances coming in from freight, it has been coming down steadily over the past 60 years," he said.

Prabhu tweeted as saying,"Addressed the @TheOfficialSBI Banking and Economics Conclave in Mumbai.Discussed initiatives, reform measures taken in Indian Railways." 

1/Addressed the @TheOfficialSBI Banking and Economics Conclave in Mumbai.Discussed initiatives, reform measures taken in Indian Railways pic.twitter.com/38Jp6KU3Ys

— Suresh Prabhu (@sureshpprabhu) September 27, 2016

Even today, the Indian Railways earns more than 70% of its incomes from freight, around 20% from ticketing and the rest from rentals.

As per the Rail Budget 2016, the freight revenue of the railways hit a five-year low in 2015-16. Revenue in 2015-16 increased 4.6%, much lower than the 10-19% growth it had registered in the previous four fiscal years.

Freight volume rose just 0.6% for the year, compared with 4 to 5% growth in the previous four fiscal years, thanks to the subdued economic activity.

The Railway Minister tweeted as saying,"Reducing freight tariff,removing port congestion charge,slew of policy interventions form the strategy to liberalise freight,boost growth."

4/Reducing freight tariff,removing port congestion charge,slew of policy interventions form the strategy to liberalize freight,boost growth

— Suresh Prabhu (@sureshpprabhu) September 27, 2016

The passenger business didn't do well either. Passenger bookings fell 0.9% and while revenue form this side grew 5.9% in the year.

Stating that he is working on to reverse the decades of underinvestment in the rail freight infra side, the minister said since he assumed office, the Indian Railways has undertaken as many as 104 reforms.

Noting that more than two-thirds of the revenue comes from freight, of which 50% come from coal, he said there is an urgent need to "diversify the freight basket, and reduce the reliance on coal."

Listing some of the reforms he has initiated on this front, he said he has "reduced the freight rates on many items, and have also done away with port congestion and handling charges. We are working towards a completely market friendly approach towards freight. Freight share cannot be increased without being market oriented."

Admitting that many rail projects are stuck mostly for want of funds, he said a whopping "Rs 6.5 lakh crore worth of railway projects languishing. We are working to significantly improve this, and by 2020 I hope to end the waiting for capacity augmentation. I hope to reduce congestion and significantly increase capital expenditure."

Promising more transparency in the functioning of the railways, he said he is also looking at bringing in more accountability and transparency to the system.

"In the next few months, we are working towards bringing paperless contracts. The Indian Railways is working to put everything into public domain to ensure accountability."