Government of India, Government Revenue, India, Indian Railways, Stories
 

Data: Railway Passenger Revenue in 2020-21 may be less than 30% of the revenue in 2019-20

0

Data shared by the government in the Lok Sabha indicates that the railway passenger revenue in 2020-21 (up to January 2021) is less than 20% of the actual revenue realized in 2019-20 and may not cross 30% by the end of the fiscal. On the other hand, the goods revenue in 2020-21 (up to January 2021) is around 83% of the 2019-20 revenue. 

In its press release on 12 March 2021, the Ministry of Railways stated that the total freight loading by Indian Railways thus far (till 11 March 2021) in the current fiscal of 2020-21 has surpassed the total freight load of 2019-20. 

A total of 1145.68 million tons of freight load was handled by Indian Railways as of 11 March 2021 in 2020-21 compared to 1145.61 million tons in 2019-20.  The Ministry of Railways further stressed the significance of this considering the impact of COVID-19 in 2020-21.  

Text  Description automatically generated

In a recent response provided in the Lok Sabha on 10 March 2021, the Minister for Railways stated that up to January 2020, 990.31 million tons of freight was loaded in 2020-21, lower when compared to 1000.77 million tons during the same time in 2019-20.  

Text  Description automatically generated

Taking these two updates into context, it appears that there is a considerable increase in the freight load of Indian railways in the last two months which contributed towards the overall numbers for 2020-21. In that same Lok Sabha response, the government further elucidates the performance of Indian Railways during the current year which is affected by COVID-19 in comparison with the previous years. 

Sharper decline in Railways’ Passenger Revenue in 2020-21 compared to Goods Revenue 

In view of the COVID-19 pandemic during 2020-21, the estimates of revenue generated through Passenger traffic were revised to Rs. 15 thousand crores. As per the information provided in Lok Sabha, as of Janaury’2021, only Rs. 9529 crores were realized.  

Understandably, the revised estimates for 2020-21 passenger revenue were much lower than the numbers for 2019-20, which was Rs. 56 thousand crores. While it is to be seen if the passenger revenue for 2020-21 reaches the lower revised targets for this fiscal, the data for recent years indicates that there has always been a shortfall in the actual revenue compared to the revised estimates. 

The drop in the revenue figures is also acknowledged by the Minister of Railways and the reasons for the shortfall in revenues in the recent years have been highlighted in the Lok Sabha answer. 

Text  Description automatically generated

The shortfall in actual revenue compared to the revised estimates in recent years is not restricted to the Passenger revenue. However, when compared to passenger revenue, the decline in the goods revenue during the pandemic year of 2020-21 is lesser. 

In spite of the COVID-19 pandemic, the revised estimates for goods revenue in 2020-21 is Rs. 1.24 lakh crores compared to the Rs. 1.34 lakh crores estimate of 2019-20.  As of January 2021, the revenue generated through goods is Rs. 93 thousand crores. As highlighted earlier, there is a shortfall even in actual goods revenue compared to the revised estimates. The widening gap between the estimates and actual revenue is evident in both the revenue from passengers & goods. 

North Central & East Central Railways realize higher proportion of passenger revenues in 2020-21. 

Among the different Railway zones, Northern and Central Zones have the highest share of passenger Revenue in 2020-21 as of January 2021. As per the data in previous years (2017-18 to 2019-20), Northern & Central Zones have not only realized most passenger revenue. But also have higher revenue estimates. However, the same is not the case for the data available until January 2021 for the year 2020-21. 

  • The revised passenger revenue estimate for Central Zone for 2020-21 is Rs. 1.9 thousand crores of which only around Rs. 991 crores i.e., 52 % of revenue is realized. 
  • Similarly, in the case of the Northern Zone, the revised passenger revenue estimates for 2020-21 is Rs.1.6 thousand crores of which Rs. 997 crores i.e., 61% is realized.  
  • The highest proportion of realized passenger revenue of the estimates for 2020-21 is in the case of the North Central Railway Zone. In fact, contrary to the trend in earlier years, the highest revised passenger revenue estimates for 2020-21 is for North Central Zone with Rs. 1.98 thousand crores. The zone also generated the highest passenger revenue as of January 2021 with Rs. 1.4 thousand crores, close to 75% realization. This zone is spread across the four states of – Uttar Pradesh, Madhya Pradesh, Haryana & Rajasthan. 
  • Another zone, which has generated higher revenue compared to the estimates is East Central Zone with Rs. 752 crores of actual realization out of revised estimates of Rs. 1.06 thousand crores. This zone covers parts of – Uttar Pradesh, Madhya Pradesh, Bihar & Jharkhand. 

The passenger revenue data clearly indicates that states which have seen a large-scale return of migrant labour during the lockdown are the ones that earned a greater share of passenger revenue compared to the estimates.  As per another response update in the Lok Sabha, these states form the major portion of the destinations of Shramik Trains. In fact, the states of Uttar Pradesh & Bihar were the destination for 70% of the Shramik trains. 

Fall in Goods Revenue during 2019-20 is contributed by fall in revenue in North-central & Western Railway Zones 

Unlike the passenger revenue, the goods revenue earned so far in 2020-21 is comparatively better with around 75% realization as of January 2021. Further, in contrast to the higher variances observed in passenger revenue realization among the zones, the share of actual revenue realization for goods is similar among the various zones. While the Central Zone is highest with 78% realization compared to estimates, the Southern Zone has 72% realization 2020-21. 

The extent of actual goods revenue realization by the end of 2020-21 compared to the estimates remains to be seen. This becomes important in the context of the fall in goods revenue observed in 2019-20. 

  • As indicated in the earlier part of the story, the actual goods revenue earned in 2019-20 was 84% of the estimates, much lesser than the 99.6% and 98 % in the earlier two years. 
  • While there is a major decline in revenues across the zones, the shortfall is more prominent in a few of the zones. North Central Zone, which is among the zones with higher goods revenue, has generated actual revenue of only Rs. 8 thousand crores out of the estimated Rs. 11.6 thousand crores in 2019-20 i.e., around 69% realization. With a reduced revised estimate for 2020-21 of Rs. 7.7 thousand crores, the realization as of January 2021 is around 76%. 
  • While the realization percentage is not as low as North Central Zone, the East Coast zone also recorded lower actual earnings compared to that of estimates in 2019-20. East Coast Zone is traditionally the zone with the highest goods revenue collection. The difference in actuals compared to estimates may be attributed to the increased estimates for 2019-20, compared to previous years, while the actual earnings nearly remained the same.
  • While there is no explicit information on the reasons for an increase in estimates for  2019-20 for East Coast Railways, it may be attributed to the highest kilometres of new railway lines completed 2019-20 being from this zone. In fact, 75 Kms of the 359 Kms of completed new railway lines in 2019-20 are from this zone. On similar lines, South Eastern, South East Central zones are among the ones which had higher revenue estimates for 2019-20 and also among the zones that had extensive development work done on the railway lines. 

With a lower revised goods revenue estimate for 2020-21, few of the zones that had a poor realization in 2019-20 have reported better realization in 2020-21 compared to the estimates. However, the goods revenue realization for 2020-21 compared to the revised estimates cannot be taken as a yardstick in view of the pandemic. 

With a clear & substantial impact on the passenger revenue in 2020-21, it is to be seen how soon the revenue would be back to the pre-pandemic levels. This will largely depend on the railways re-starting all the services that were running before the lockdown. The lesser impact on goods revenue has in a way rescued the overall revenues.  

The revenue realization from both passengers and goods in the next few years will offer better insights on the long-term impact of the pandemic and whether the new railway lines laid, development works undertaken during the lockdown would translate into higher revenues for the railways. 

Share.

Comments are closed.

scroll