Indian Railways earning to take a hit due to COVID-19

With passengers carrying trains operation suspended due to lockdown, Indian Railway is likely to lose its revenue target in the current financial year.

The railways, which operates over 13,500 trains carrying 23 million passengers daily, halted all its passengers' trains since lockdown announced on March 24 and operates only goods trains transporting essential commodities and other goods.

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In 2019-20 is a tough year for national transporter due to slow down in freight movement, a major revenue earner, because of the economic slowdown. Even in March, the month of last fiscal, railways faced severe slow down in passengers ticket booking due to coronavirus.

In last fiscal, the railway kept its earning target of Rs 56,000 crore from passengers booking segment while Rs 1.43 lakh crore from freight. However, national transporter failed to meet the target due to Covid-19 crisis.

In 2020-21 fiscal, it is targetted to earn Rs 61,000 crore from passengers booking and Rs 1.46 lakh crore from freight.

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However, achieving the target is tough as there is no earning from passenger bookings in April. The railways refunded Rs 1,490 crore as it cancelled 94 lakh tickets booked for travel from March 24 to May 3. Besides, railways also assured full refund if any passenger wants to cancel their ticket booked till July 31.

The current fiscal will be a tough year for railways as the earning from both passengers as well as freight will take a hit due to Covid-19. If economic slowdown will hit freight movement, passengers will be hesitant to travel till they get confidence that there will be no coronavirus spread any more.

Though during lockdown period, the railways transporting maximum freight to make utilise empty track due to absence of passengers train, coming days the demand for wagons will slow down due to lack of demand in steel, cement or coal following possible poor economic activities.

The CAG in a report revealed that the Indian Railways had scored its worst-ever performance in a decade with an operating ratio of 98.44% in 2017-18. This basically means to earn Rs 100, Railways spent Rs 98.44 — leaving it with a profit of Rs 1.56 for every Rs 100 it earned.