Railway Passenger Revenue in 2020-21 less than 30% than in 2019-20
Sai Krishna Muthyanolla
March 19, 2021
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.
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.
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.
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 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.
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.