9.28 Indian railways system is the second largest system in the world under a single management. It is a multi-gauge system operating on three gauges - the Broad (BG), the Metre (MG) and the Narrow (NG). At the end of March, 1990, the route length of the rail network comprised 62,211 route kms. including 14227 route kms. of either double or multiple tracks. About 56 per cent of the total route kilometers is on the broad gauge, accounting for 90.50 per cent of the freight tonne kms. and about 83.00 per cent of the total passenger kilometers. Metre gauge, covering about 38% of the total route kms. carries 9.43 per cent of freight tonne kms. and 16.42 per cent of the passenger kilome- ters. The narrow gauge comprising 6.54 per cent has an insignificant share in the total traffic. Electric traction at the end of Seventh Plan, constituted about 15% of the total route kms. and accounted for about 42% of the total gross tonne kilometers of freight traffic on BG and about 35% of the total passenger train kms. Railways have a fleet consisting of 8590 locomotives, 37,953 coaches and 3,49,560 wagons spread over 7076 railway stations. The rolling stock fleet is serviced and running repairs are undertaken in 225 loco sheds and 401 carriage and wagon sick lines and central repair depots situated all over the network. Periodical overhaul of rolling stock is undertaken in 49 workshops.
9.29 Due to the vast geographical spread, uneven distribution of natural resources and large population, the advantages of railways as an important and inexpensive mode of transport are obvious. Demand on the Railways for carrying freight and passenger traffic is increasing very fast and it is expected that by the turn of century growth of freight and passenger traffic would be almost double of the level attained in 1987-88. In a situation where demand of transport system is rising faster than capacity and when the present capacity is fully committed to carry core sector traffic like coal, foodgrains, petrole- um, oil and lubricants (POL), fertilizers etc., Railways are left with no margin for carrying general cargo or other types of industrial traffic even when offered. Increasing railways' capacity to handle higher quantum of freight and passenger traffic, thus, becomes ex- tremely important area and would need to be attended to during the Eight Plan period.
9.30 A review of plan investments in the past would indicate that the outlay of railway sector as a percentage of total plan outlay which ranged between 11.1% and 15.5% in the first three plan periods came down to as low as 6.9% to 5.9% in the next four plan periods upto the Seventh Plan. As a result, the investment planning for Railways in the recent years has been barely adequate to meet the minimum needs of the traffic growth and the input of the network expansion has been low.
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9.31 The growth of rail transport India has been impressive.From 128% million originating passengers in 1950-51 the figure had reached nearly 3637 million in 1989-90. Passenger kilometers have increased four fold from 66517 million to about 2,77,885 million. similarly originating revenue tonnage increased by ore than four times from 73 million tonnes in 1950-51 to 310 million tonnes in 1989-90. New tonne kms. (revenue) have increased six-fold from 37565 million in 1950-51 to 229020 million in 1989-90.
9.32 Indian Railways have assets worth nearly 19730.59 crores as on 31.3.1990 and employ 1.64 million people. As on 31.3.1990 Indian Railways had 3336 steam locomotives, 3610 diesel locomotives, 1644 electric locomotives, 27992 coaches, 6861 other coaching vehicles, 3100 EMUs and 349661 wagons. Over the last three decades the Railways have recorded an average growth rate of 5% per annum in both freight and passenger traffic.
9.33 The railway system operates through 7076 railway stations. Four sides and two diagonals of the golden quadrilateral with its vertices at Delhi, Bombay, Calcutta and Madras carry more than 50% of passenger and 60% of freight traffic. It has been estimated that in order to keep pace with the demands of a vibrant economy, it will be necessary for the Indian railways to almost double the existing capacity by the year 2000 A.D. The Eighth and Ninth Plans are, therefore, crucial for the Railways. The thrust in the Eighth Plan has to be in the direction of capacity generation, rehabilitation and modernisation. Manpower planning, human resource development, energy conservation, greater safety, financial viability and above all customers' satisfaction through reliability and quality of service are other important objec- tives.
9.34 Due to technological changes, change of traction and operational improvements and innovations, staff redundancies occur. The major areas are steam locomotives, goods sheds marshaling yards etc. manpow- er planning, manpower reduction and human resources development have to be the main planks for future productivity. Qualitative improvement in the employees' profile is needed more than ever. While staff pro- ductivity, as measured in number of traffic units per employee, utili- sation of assets in terms of net tonne kms. per wagon day, wagon turn round, loco utilisation etc., have improved over the years, there is scope for further improvement in these areas by resorting to techno- logical upgradation and further improvement of operating pattern by innovative approaches. Similarly there is need for giving greater emphasis on energy conservation, phasing out steam locomotives, meas- ures to lower the reduction in consumption of HSD and lubricating oil. Introduction of low idling features in diesel locomotives, use of rail and flange lubricators and energy audits of major railway installa- tions are some of the areas which call for greater attention and action. Similarly improvement is also called for in track technology since the track constitutes the basic infrastructure of the Railway system.
9.35 Railways, however, operate under certain constraints. They have limited freedom to fix fares and freight rates to reflect the actual costs. The railways are a basic infrastructural necessity and act as a catalyst for economic growth. In the process, Railways trend to subsi- dies in a way and nourish the economy and incur social cost, to ful- fill its public service on obligations much beyond the normal call of any transport system. The impact of social burdens on the railway finance has been growing over the years. In 1975-76 these losses stood at Rs. 188 crores while in 1989-90 they were about Rs. 1900 crores. The loss in passenger traffic, both suburban and non-suburban, loss in carrying certain essential commodities like foodgrains, salt, fodder and losses on account of uneconomic branch lines mostly account for the social burdens.
9.36 Indian Railways are wholly owned and operated by the Government of India. budgetary support from the general exchequer for the railway plan, however, is declining over the years. It came down from 75% in the Fifth Plan to 58% in the Sixth Plan and to about 40% in the Sev- enth Plan. In 1990-91 and 1991-92 budgetary support has been of the order of 31% and 32% respectively. While on the one hand there is need for investment to support and increase the transport capacity, on the other, due to resource constraints, the budgetary support for Railway plan is declining. The Railways, therefore, had to take recourse to market borrowings during the Seventh Plan by floating bonds through Indian Railways Finance Corporation. About Rs. 2500 crores were bor- rowed during the Seventh Plan period. While the market borrowings, to some extent, bridged the gap between the requirement and availability of resources, it has been imposing a heavy drag on its working ex- penses. As against 6.5% dividend which the Railways have to pay on the capital provided by the general exchequer, it has to pay 14.5% as leasing changes for 10 years' railway bond (interest and amortisation cost). There is, therefore, a need to restrict the limit of market borrowings which otherwise may threaten the financial viability of the system.
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9.37 The physical targets and achievements during the Seventh Plan are summarised in Annexure-9.2. The picture that emerges is as follows:-
(i) Additional traffic of as much as 70 million tonnes of freight traffic over a period of 5 years was carried. This in itself was a remarkable achievement compared to the performance in the past. Howev- er, a shortfall of about 11.00 million tones in the targetted traffic of 345 million tones was observed mainly on account of less that anticipated offer of coal, foodgrains and steel traffic for movement.
(ii) There was increase in the lead of freight traffic during the first three years of the plan in relation to what was assumed at the time of the formulation of the Seventh Plan. Against a target of 680 kms. at the end of the Plan, the average lead during 1987-88 reached a level of 726 kms. Thereafter, however, the average lead started show- ing a downward trend and for 1989-90 of the average lead is estimated to be around 708 kms. The efforts to rationalise bulk movement, in order to keep down the lead of haul, will need to be continued.
(iii) Passenger traffic (non-Suburban) increased by 6.5 per cent per annum during the first three years. During the last two years, the increase has slowed down. Overall, during the Seventh Plan, the in- crease is estimated to be of the order of around 4.8 per cent per annum. It is pertinent to note that investment planning in the Rail- ways has been done largely on the basis of regulated growth of passen- ger traffic, preference being given to freight movement in a situation of overall constraint of resources. Growth in passenger traffic in actual practice could not, however, be contained and has exceeded the stipulated targets. The result is the continued use of old and over- aged coaches which in turn bring down the quality of service. Replace- ment of overaged coaching stock warrants special attention during the Eighth Plan.
(iv)Impressive improvements have been recorded in productivity levels expressed in terms of freight loading and movement. The wagon utilisa- tion index reached a level of 1453 Net Tonne Kms (NTKms) on Board Gauge sections by the end of 1988-89 from 1150 NTKMs during 1984-85, but had came down to 1428 NTKMs in 1989-90. An increase of about 24% was witnessed during the plan. The increase in the index on Metre Gauge sections has been about 43 Percent. The need to augment the capacity of the railway system to meet the projected traffic as well as to provide a cushion to take care of seasonal peaks was highlighted during the Seventh Plan. Severe constraint of resources, however, came in the way of allocating requisite funds to the Railways. Financing thought open market borrowings (a relatively costlier form of funding) had to be resorted to. The financial resources generated and made available were, however, still short of requirements. While the Rail- ways have more or less met the demand for freight services, especially in respect of bulk commodities to critical users, the same cannot e said about some other commodities and also general users. Their share in the movement of commodities like cement, fertilizers etc., needs to be substantially stepped up in the interest of reducing costly road movement. Railways would need to continue their efforts to further optimise the use of their fixed and rolling assets. It is clear that greater investment will have to be directed towards easing capacity constraints in selected segments of the truck routes.
(v) In the above context, development of terminals is also important requirement. Loading and unloading arrangements in request of bulk commodities are the responsibilities of the major users of rail serv- ices like the collieries, the thermal power stations and other major industries. The major users have not made investments necessary for development of rapid handling terminals which can substantially reduce the detention of the rolling stock. Time has row come to seriously reconsider this arrangement and explore the possibility of the Rail- ways sharing the required investment with the major users in the interest of better utilisation of the rolling stock.
(vi) The Railways had recorded an excellent performance during the the Seventh Plan period in terms of additional transport effort, rehabili- tation of the system, financial performance, better productivity, technological, upgradation & modernisation and industrial relations. The incremental revenue earning freight traffic went up by 73.6 mil- lion tonnes (236.4 MT top 310 MT) which is equivalent to the increase in 19 previous years. On the financial side, the Railways declared a surplus of Rs. 533 crores after meeting their dividend liability in full during the Seventh Plan. It is noteworthy that this was achieve- ment While making substantially stepped-up contributions to the Depre- ciation Reserve Fund (Rs. 6735 crores) and Pensions (Rs 2310 crores). But there is continuing need to contain operating expenses and in- crease traffic receipts. The losses in the operation of passenger services are increasing at an alarming rate. There is a limit to the extent to which losses can be offset by cross - subsidisation. In
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fact, the tariff for freight traffic has now reached a level where further increases are likely to prove counter-productive. Adjusting the passenger fares to reduce losses appears inescapable. Action in this direction is essential to provide adequate resources for develop- ment.
(vii) Initially, an outlay of Rs. 12,344 crores was allocated to the Railways for the Seventh Plan. However, as a result of a subsequent review, an enhanced outlay of Rs. 16549 crores was provided. The approved plan outlays during each year of the Seventh Plan and actual expenditure is presented in Annexure-9.3. The investment during the Seventh Plan was financed as follows:
(Rs. crores)
(i) Budgetary support 6942 (41.95%)
(ii) Bonds 2520 (15.22%)
(iii) Internal resources 7087 (42.82%)
Total 16549
(viii) Normally, all new railway line projects are undertaken out of the funds allotted by the Government of India. For the first time, a new experiment has been undertaken for funding the construction of the Konkan Railway through the setting up of a Corporation. The equity contribution to the Corporation is to be shared between the Ministry of Railway and the beneficiary states, in the ratio of 51 : 49. The balance fund required would be raised from the open market in the form of tax free bonds.
(ix) It has, however, to be recognised that all the investments allo- cated to the Railways are not directly utilised for augmenting the capacity of the system. A major portion of allocations on replacement of overaged assets do not add to capacity except to the extent of upgraded equipment. Similarly, allocations under electrification may not necessarily result in capacity augmentation but only improve operational efficiency and lead to conservation of fossil fuels. Agains, there are a large number of miscellaneous items of expenditure such as works undertaken for operational reasons as well as for staff welfare and passenger amenities. Similarly, investments made by Rail- ways in public sector undertakings, metropolitan transport and inven- tories do not result in capacity augmentation. It is observed that almost half of the total allocations of the Railways go in for such other works, not directly linked with increasing capacity of the system.
(x) A major feature of the modernisation efforts on the Indian Rail- ways is the progressive use of computers. Over the last decade, com- puterisation is being progressively extended to core accounting sys- tems, inventory control, management information system in the produc- tion units and operational control rooms, passenger reservations and recently to freight operations. Computerised reservation facility will shortly cover 18 cities constituting almost 64% of the total reserva- tion work load in the Railways. Many studies relating to the introduc- tion of freight operation information system (FOIS) have been under- taken and completed with the assistance of a specialised organisation set-up for the purpose. As a first step, the freight operation infor- mation system is being installed on the Northern Railway to evaluate its projected efficacy before extending the system to other zonal railways.
(xi) The Research Designs and Standards Organisation (RDSO) has achieved a measure of success in system and product development, as well as in designs. The RDSO has prepared a Technology Development Plan wherein five missions were identified for technology development. The objectives of these missions are to develop technologies for the operation of 4500 freight services at double the existing average speeds on mixed traffic routes; the operation of passenger services upto 160 kmph on mixed route and 200 kmph on dedicated routes, heavy haul freight trains upto 18000 tons at 75 kmph. metre gauge system covering passenger and freight services and transhipment facilities.
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Areas of Concern and Major Issues 9.38 Railways' Share in Total Traffic. Though Railways are energy efficient and eminently suited for movement of freight traffic over medium and long distance, a good share of this traffic is carried by road. To reverse this trend it is necessary to substantially improve, inter-alia, (a) the carrying capacity on selected section of the Railways (b) the operational efficiency and commercial practices of the Railways; (c) linkages with road transport at loading and unloading centres.
9.39 Capacity Requirements - The capacity of the railways system has almost reached a plateau and the available stock in the system appears to have been fully used. The capacity assessment of the system neces- sarily has to contend with certain inherent characteristics of the Railways as a mode of transport. Common physical assets are made use of to provide different types of transport services like freight and passenger movement and any charge in the mix alters the output of the system. Again, a considerable portion of the assets is location-spe- cific and cannot be adjusted to charges in the demand for services. Additional output henceforth would be possibility only on the basis of adequate investments - both for creation of additional capacity and for replacement of assets. The important rail corridors connecting major centres of activity which handle massive volume of traffic have reached a saturation level. Development of alternate routes, rather than additional trackage on these routes, may subserve the purpose of both easing the traffic and opening new areas of development. Further, a system approach needs to be adopted while building new railway lines so that aggregate capacity of Railways could be enhanced.
9.40 Facilities/amenities to the passengers - As against the target of 2% growth in passenger traffic, the actual increase is anticipated to be around 5% per annum and will continue to remain so. The increasing passenger traffic cannot be ignored any more, particularly the long distance travel. Adequate investments have to be considered for meet- ing the realistic demand. On the other hand, efforts to shed short distance travel would need to be pursued vigorously. Appropriate policy measures are required to be taken in this regard.
9.41 Energy Conservation - The Railways are a major user of liquid fuels and must contribute to energy conservation. The gradual charge of traction from steam to diesel and to electricity has undoubtedly increased the efficiency of the system. However,, from the data relat- ing to consumption of diesel over years it is observed that there is marginal decline in energy consumption for freight services (from about 4 Kiloletres (Kls) to 3.5 Kiloletres. for moment of 1000 Gross Tonne Kms (GTMMs), whereas for the passenger service, the diesel consumption has slightly gone up i.e. from 5.30 Kls to 5.44 Kls for movement of 1000 GTKMs. The Railways have initiated steps for introduction of fuel-efficient locomotives. Along with this, appropriate R&D measures need to be taken to improve the fuel efficiency of the existing locomotives, which would remain with the system for years to come.