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India
05 Apr 2017

Indian railways is making headway in the right tracks

Demonetization is a station left far behind with Indian Railways posting its all-time high revenue of Rs 1.68 lakh crore in the just-ended fiscal year.

Suresh Prabhu led the Indian Railways through the journey which overcame slumps by banking on freight traffic boost and critical reformations in passenger fares.

Here is a look into one of the most successful public sector enterprises of India.

In context

Indian Railways profit reaches its all-time high
How the money wagons came through

Profits

How the money wagons came through

The passenger segment managed to garner a profit of Rs. 48,000 crore taking a Rs. 2,000 crore jump from the previous year.

Freight revenue was up at Rs. 1.09 lakh crore from the Rs. 1.04 lakh crore which was posted last year.

Non-core revenue which comprises of money garnered from selling scrap and advertising rights, stood at a staggering Rs. 11,000 crore.

Measures

Counter measuring every obstacle on the way

Suresh Prabhu cited that this was an expected outcome as they had been keeping a strict eye while making necessary policy changes whenever they saw any fall in the traffic.

The ministry has offered large discounts on the loading of certain commodities, nullified several freight charges and also introduced dynamic pricing for premium passenger trains.

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Targets were achieved prior deadline

Goals reached

Targets were achieved prior deadline

Indian Railways has managed to ferry 1.107 billion tonnes of cargo superseding the target of 1.094 billion tonnes which had been set for fiscal 2017.

Railways Minister Suresh Prabhu said that although they have done better than the target which had been set for them, they aim to do 1.2 billion tonnes in the current fiscal year to bolster profits.

Outlook

Upping the ante in coming years

The Railways ministry is currently working on a five-year development plan which includes a capex of Rs. 8.5 lakh crore.

The efforts of the past years like freight reforms have already started showing benefits and the commodities demand has also seen an uphill movement says Prabhu, thus keeping in tune with the plan at current pace will not be an arduous task.

Indian Railways Aadhaar challenge

Aadhaar

Indian Railways Aadhaar challenge

Like every other government initiative, the Indian Railways has also declared that it will now shift to an Aadhaar based ticketing system.

It has earlier made Aadhaar compulsory for senior citizens looking to avail concessions.

Although, it's a task to put an effective checking platform in place but will be a countermeasure against touts who end up buying tickets in bulk and creating shortages.

Concern

There is, however, one nagging reason to worry

Although, Indian Railways has been making profits at an increasing rate, the operating ratio remains extremely high at 95%.

This, in essence, means that they are losing money as soon as they are making it, which leaves behind very little funds to carry out maintenance and safety projects and therefore, need government help to sustain itself.

A daily herculean feat

Indian Railways run 11,000 trains on tracks that spread over 60,000 km in length on a daily basis and is the preferred mode of transport for 13 million people. It employs around 1.54 million people to keep the entire operation running.

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