Aug 11, 2017 06:16 PM IST | Source:

Economic Survey asks Indian Railways to tap non-fare revenue model

Survey suggested monetisation of land adjacent to tracks, commercial use of vacant buildings and other non-fare methods to generate revenue

Economic Survey asks Indian Railways to tap non-fare revenue model

Nikita Vashisht

Moneycontrol News

The finance ministry's Economic Survey has advised Indian Railways to tap non-fare measures and station redevelopment to save its failing financial health.

The Economic Survey's Volume 2, which was tabled in Parliament on Friday, said that railways could choose to earn more by monetising its assets and earning through non-passenger fare.

It suggested commercial exploitation of vacant buildings at the station, monetisation of land along tracks by leasing it to promote horticulture and tree plantation, and through advertisement and parcel earnings.

Indian Railways has been losing out to other modes of transport, especially airways, under passenger traffic thereby registering a negative growth over the years. Falling airfare and better speed bargain has given airlines an added edge over railways.

“After a consistent rise from 2002-03 to 2012-13, the number of passengers travelling by train has started declining since 2013-14 while the freight traffic has increased over the years,” said the Survey.

Also read: Economic Survey: Employment creation a great challenge

The passenger traffic has fallen from 8,421 million people in 2012-13 to 8,107 million people in 2015-16.

The Survey said that during the period ranging from 2002-03 to 2015-16, passenger fare has increased at 3.6 percent compound annual growth rate (CAGR).

Indian Railways incurred losses of Rs 33,491 crore on passenger operations in 2014-15 while in 2015-16 the figure was Rs 35,918 crore

The Survey said that during 2016-17, Railways registered a negative growth of 4.5 percent over previous year. The freight earning stood at Rs 1,04,339 crore “due to carrying larger volume of low fare freight in the year”.

The Survey also said that the ‘dynamic pricing model’ of Indian Railways coupled with non-fare methods must help it earn higher revenue.
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