Chapter II

HISTORICAL PERSPECTIVE OF RAILWAYS AND PERFORMANCE OFINDIAN RAILWAYS

2.1 Introduction

2.2 Origin of Railways

2.3 Railways in India Under British Rule

2.4 Indian Railways After Independence

2.5 Performance of Indian Railways since Planning

2.6 Recent Trends in Indian Railways

2.9 Summary

38

2.1 INTRODUCTION

The growth of railways in general and in India in particular, has been

discussed in this chapter. In the earlier part of this chapter, the invention of

railways and the technological changes made by different scientists have been

highlighted. The contribution by the British Government and British Companies

in the railway development in India and the impact of World Wars and partition of

Pakistan has been discussed in this chapter. The present position of Indian

Railways like passenger traffic, goods traffic, revenue from each zone, number of

passenger trains, amenities to passengers, number of accidents, finance of Indian

Railways, and the recent trends in Indian Railways have been discussed in the later

parts of this chapter.

Only secondary data were used in this chapter and the data were collected

from the books on transport, journals published by Indian Railways, Yearbooks of

Indian Railways, office manuals of Indian Railways, and publications of Centre

for Road Transport and Centre for Monitoring Indian Economy. Internet facility

has also been used to collect data regarding the performance of Indian Railways.

The data have been analysed by applying percentage analysis, growth rate,

classification tables and compound growth rate.

I,

39

2.2 ORIGIN OF RAILWAYS

The history of railways began in the year 1730. The mode of railway, a

track constructed mainly for the accommodation of wheeled vehicles had its origin

in Babylonia.. Greece and Roman Empire. Wooden tracks on which four-wheeled

wagon ran were used in the mines of Germany to take coal from the coal mines to

the nearby riverside for further transportation.

In early times, the rails were made of timber and thin iron plates laid over

the surface protected them. The iron plates were used to reduce the wear from the

friction of wheels. Rails made wholly of iron were first made and used only in

1767. This strengthened the track to bear heavier loads and endure heavier use.

The wheels of the wagon were also made of iron with flanges of the modern type.

In certain parts of Britain such as Midlands and South Wales an alternate flat

wheel was in use, the flange being part of the track and that was called

'plate ways'.

The wagons were moved on the railway lines by horses and by manpower.

In 1807, Oystermouth Railway Company of London ran horse drawn passenger

service on these railroads. James Watt discovered the power of steam by watching

his mother's tea- kettle. Till then men had been trying to build steam engines.

In 1829, George Stephenson of England built an engine powerful enough to pull

40

itself and a train of little cars along a track. Until the invention of steam engines,

horses were considered as the fastest means of transport.

The Liverpool Manchester Railway Company ran the first fully locomotive

train between Liverpool and Monchester on 15th September 1830. The Queen of

England made a railway journey in 1842, after which all people considered that

the train travel was a safer one.

Travel on an early train was a rough experience. Coaches were connected

to each other and to the engine by loose chains. Only the engine had brakes.

When the tram started, the wood burning locomotive would shower a cascade of

sparks over the passengers who sat on the outside seats and on the coach roofs.

Each coach will start with a tremendous lurch knocking most of the passengers out

of their seats.

But due to the invention of new technologies in the production of railway

coaches and engines, now- a- days travel by railways is considered to be the most

sophisticated mode of transport. Sleeper facilities provided 'in air-conditioned

coaches attract a large number of passengers travelling for long distance.

High-speed trains can compete with airlines. In most of the cities airports

are on the outskirts of the city. For short and medium distance travel, if airways

are preferred, the time taken to reach the airport and from the airport to the

41

destination will be more. Trains on the other hand take passengers all the way into

the cities. So passengers on high-speed trains may complete their entire journey in

lesser time than they do by air.

2.2.1 Railways in America

In the United States of America 12 major independent railroad companies

and several hundred smaller operators provide freight services. Long distance

passenger trains are run by the national railroad passenger corporation

(AMTRACK), which is federally assisted. AMTRACK was set up in 1971 to

maintain a basic network of long distance passenger trains, and is responsible for

almost all non-commuter services over 38,000 kms.'

2.2.2 Railways in Russia

The length of railways *in Russia in 1996 was 87,000 route kilometres, of

which 44 per cent has been electrified. It is estimated that 10 per cent of all the

railways in Russia are in someway defective. 2

2.2.3 Railways in Canada

Canada has two trans-continental systems. The Canadian National

Railways System privatised in 1995, operates 32,500 kms. of routes and the

42

Canadian Pacific Railways, a joint stock corporation operates 30,039 kms. There

are several provincial and private railways.

2.2.4 Railways in Germany

In Germany Railways were privatised in 1993. On Januaryl, 1994, West

German Bundesbahn and the former GDR Reichsbahn were amalgamated as the

Deutschebhan., a joint stock company. Track maintenance, long distance passenger

traffic, regional passenger traffic and goods traffic are run as four separate

administrative entities. Length of railways in 1997 was 44,823 kms of which a

length of 19,088 kms was electrified.

2.2.5 Railways in Japan

In April 1987, the Japanese National Railways was reorganized into seven

private companies, of which six companies operate passenger services and one

company operates goods traffic. An undersea tunnel linking Honshu with

Hokkaido was opened to railway services in 1988.

2.2.6 Railways in Great Britain

In 1994 the national railway network was restructured to allow for

privatisation. Ownership of track, stations and infrastructure was vested in a

Government owned company, 'Railtrack' which was privatised in 1996. Passenger

43

operations were reorganised into 25 train operating companies and all had been

transferred to private sector by Februaryl997. By March 1997, all freight

operations had been privatised. In 1999, the total route length was 16,659 kms, of

which a length of 5,166 was electrified. 6

Because of the uncertain future faced by the railways, total worldwide

trackage has remained more or less stable for a number of years and very few new

railway lines are being constructed. Trains use less energy per passenger than

automobiles, aeroplanes and buses. Railways could help to conserve energy, if

they attracted more passengers away from air and highway travel.

2.3 RAILWAYS IN INDIA UNDER BRITISH RULE

At the beginning of the nineteenth century, India consisted of long chains

of self-contained villages. The people in the villages use only the locally available

products. Means of transport and communication available were limited. Roads of

modern type did not exist. Wheeled carriages were unknown in most parts of the

country. In the 19th century most parts of India were controlled and administered

by Britain. British administrators in India realised the importance of improved

means of transport and communication, to consolidate political power and to

exploit the potential resources of the country. India had the unique distinction of

being the first country in Asia to have railways.

In 1844-45 two private companies of England known as "East India

Railway Company" and the "Great Indian Peninsula Railway Company" were

formed to begin the construction of railways in India. Railway construction was

made of indigenous capital in England, America, Germany and in other advanced

countries. But in India, British liked their own companies to start railways. The

promoters of East India Railway Company and Great Indian Peninsula Railway

Company insisted on a guaranteed rate of interest from the Government, because

demand for railway service on the part of the Indian people, traders and

industrialists were uncertain. State assistance was regarded essential because

capital was to be raised in England.

The Government of India, then controlled by British people, wanted an

early development of railways in view of its military, political and commercial

importance. The Chamber of Commerce in England also made strong

representation for the construction of railway lines in India, because it was felt that

it would boost Indian export of cotton. British administrators consented to give a

guaranteed minimum rate of return of 5 per cent per annum on capital invested.

British followed from time to time four different systems such as Guarantee

System, State Subsidy, State Ownership and Management, and Mixed Enterprise.

2.3.1 Guarantee System (1853-1869)

In 1849, East India Company entered into a contract with Great Indian

Peninsula Railway Company and East Indian Railway Company for the

construction of railways. The important conditions laid down in the contract were

the following:

(i) The Government guaranteed the return of 5 per cent per annum on capital

invested.

(ii) The land and works were to become the property of the state after 99 years.

The Government would pay a fair value as compensation.

(iii) The Government got the powers of control over the working of railways,

route, gauge and construction and fixation of rates and fares.

(iv) The Government would give free land for the construction of railway lines

and railway stations.

(v) For exchange purpose 1 rupee is equal to ish lOd.

The East India Railway Company entered into a contract for the

construction of a railway line between Ranigange coalfields and Calcutta, the then

capital of India. The Great Indian Peninsula Railway Company entered into a

contract with the Government for the construction of an experimental railway line

45

between Bombay and Thana. Of these two companies, the Great Indian Peninsula

Railway Company completed the construction work at an earlier date. The first

train in India, as well as in Asia, ran on 16th April 1853 from Bombay to

Thana covering a distance of 34.44 kms, carrying 400 guests in fourteen railway

coaches 6

East India Railway Company opened the section from Howrah to Hoogly a

distance of 37.47 kms to traffic on 15th August 1854. A new company by name

East Bengal Guaranteed Railway Company was registered in 1857 and it

constructed a railway line between Calcutta and Poradash, now in Bangladesh. In

the south, on 1st July 1856, a railway line was constructed between Viyasarpadi to

Walajahroad by Great Southern India and Carnatic Railway Company. Two

companies, namely, Great Indian Peninsula Company and East India Railway

Company linked up Kolkatta and Mumbai. In Jan 1871, Kolkatta was linked with

Delhi by railways.

This policy of railway construction by private enterprises with a guaranteed

interest on capital outlay was carried out up to 1869. Under the guarantee system

the Government had to suffer heavy losses, such as payment of shortfall of

guaranteed minimum, loss in rate of exchange and compensation for lands

purchased for construction of railways. During the 15 years the Government had

47

to pay Rs. 13.5 crores for guaranteed minimum 7 . The total loss suffered by the

Government under guaranteed system was estimated to be Rs. 19.54 crores.

Foreign capital invested on Indian Railways was also managed by foreign

companies. They were interested only in strengthening their vested interests. There

was no fear of losses. The Indian guarantee nullified the efforts for economy

promoted recklessness and involved the country in liabilities much beyond what

people could bear or what the needs of time could justify. During the period of

guarantee system 4255 miles of railway line was constructed.

2.3.2 The Period of Subsidy (1869-1871)

The failure of the guarantee system brought to light the idea of giving

subsidies instead of giving guarantee for a minimum rate of return. Two

companies namely India Branch Railway Company and East Indian Tramway

Company of Madras began the work under the subsidy scheme. A subsidy of

£100 per annum per mile opened was granted for 20 years and an additional

amount of £100 for every bridge constructed involving more than £ 10,000.

During the period of subsidy the railway track length was increased to 4475 miles.

2.3.3 The Period of State Construction and Management (1871-1881)

By the year 1871 the British Government adopted the policy of state

participation in the construction of railways. Select Committee, appointed in 1871

to look into the Indian finances, recommended raising loans in India and also

48

restricted the expenditure of the Government for Indian Railways to £ 2,5 million

per year.

A rapid extension of railways was required in 1880, because the Famine

Commission of 1880 pleaded for the construction of 5000 miles immediately. In

the year 1875-76 the total miles opened for traffic increased to 6519 miles and in

1880-81 to 9325 miles and in 1881-82 to 9875 miles.

In 1881-82, out of 9875 miles of Indian Railways, the guaranteed

companies owned 6132 miles and the state owned 3743 miles. The profit earned

by guaranteed railway companies was 6.20 per cent on capital invested whereas it

was only 2.15 per cent in state owned railways. The earnings of state railways

was less because nearly one-third of the total mileage consisted of those lines

which were necessary for defence from the strategic point of view.

In 1869 the Suez Canal was opened and this reduced the distance from

India to Britain by 5000 miles.. The reduction in distance offered a great stimulus

to the import and export trade of India.

2.3.4 Mixed Enterprise (1881-1900)

By the end of 1881, the Government was compelled to revise the policy of

state ownership of railways. The recommendation of constructing 5000 miles of

i,J

railway line made by the Famine commission could not be carried out. At the

same time British merchants were pressing for the development of railways in

India. The Russian invasion through Afghanistan also motivated the Government

to frame a new policy of mixed enterprise.

As per the new policy of mixed enterprise the Government proposed to

leave the construction of remunerative and productive lines to private enterprises

and the Government to take up the construction of unremunerative lines. The

policy was not sound from the practical point of view, because the burden of the

State Government increased heavily.

During 1882-1900 with the exception of Bombay-Baroda and Central India

Guaranteed Railway Company and Madras Guaranteed Railway Company, all

guaranteed railway companies came under the ownership of the Government.

2.3.5 Railways in Twentieth Century

In 1905 Bombay-Baroda and Central India Guaranteed Railway Company

and Madras Guaranteed Railway Company were taken over by the Government,

but the management was left with them. In 1905 the Railway Board was set up

with a president and two members under the Department of Commerce and

Industries. In 1908 the Railway Board was reorganised with large powers to

improve the standard of their operational efficiency and administrative efficiency.

50

The railway kilomeireage increased from 39,603 kms in 1900 to 56,456 kms in

1914 and the capital outlay was increased from 329.33 crores to 495.09 crores.

2.3.6 Railways During the First World War (1914-20)

With the outbreak of the First World War, the railway materials, wagons,

carriages and locomotives could not be imported. New works other than those for

defence purpose were suspended. There was utter breakdown and rapid

deterioration of the Indian Railways during this period. There was considerable

transport of troops to South Africa. Part of the railway staff, rails and rolling stock

was despatched to East Africa. Due to shortage of passenger coaches, wagons

were used to carry passengers. Regarding the breakdown the Acworth committee

observed, "There are scores of bridges with girders unfit to carry trainloads up to

modem equipment. There are many miles of rails, hundred of engines and

thousands of wagons whose rightful date for renewal is long overpast".

During this period the passenger fares were considerably increased over

which there was great dissatisfaction among the public. Some lines of strategic

importance were constructed with the result that the length of railway lines went

up to 58,776 kms. and the capital investment rose to Rs.566.38 crores. After the

end of war, things came back to normalcy; people advocated the separation of

railway finance in the interests of both the Government and the Public.

51

2.3.7 Era of New Policy Development (1920-30)

After the First World War the Railway Board secured Rs. 150 crores as

special grant to be spent over a period of five years on renovation of old stock,

which helped to improve the performance of railways. During this period the

ownership of all lines controlled by guaranteed companies was acquired by the

State. Till 1920 the Railway. Board's office was in London. In 1920 Acworth

Committee recommended that the Railway Board with head office in London

could not do justice to the people of India as it would consider the representation

of the British merchants only, and so the Railway Board should have its office in

India. On this recommendation the Railway Board headquarters was shifted to

India. More Indians found jobs under the state management and more attention

was paid to passenger amenities. More comfortable seating accommodation was

made available in railway coaches. Central and Local Advisory Committee were

also formed to help the railway administration.

In 1924 the railway finance was separated from general finance. A standing

finance committee for railways comprising the members of the legislature was

formed. It was provided that the railway budget should be presented at the

Legislative Assembly in advance to the central budget, and separate days should

be allotted for discussion on railway budget.

52

A Depreciation Fund based on the estimated lives of the assets was made

from the year 1924, which enabled the renewal of assets. Appropriation to

Depreciation Fund was made from the revenue of every year. The burden of

replacement and renewal would be distributed over a number of years according to

the life of the plant.

On separation of railway finance from general finance, the railways had to

pay a sum of not less than one per cent of the capital employed to general finance.

A Railway Reserve Fund was also set up to strengthen the financial position of

railways. This fund helped them in times of adversity. In the years of prosperity

the railways could build up the reserves and it could be used in the years of

deficiency.

2.3.8 Period of Depression and Recovery (1931-1940)

The great economic depression witnessed during this period adversely

affected Indian Railways. Upto 1930 . Indian Railways were constantly yielding

some profit and the performance was progressing favourably. But after 1930 their

income was affected because of curtailment in export and import, rail - road

competition and flood and earthquakes. In most of the years during this period

deficit railway budgets were presented. Railway earnings declined considerably.

For making payment of interest on capital the entire money was gradually

53

withdrawn from Railways Reserve Fund. An amount of 51 crores had been

borrowed from Depreciation Fund. The contribution of railways to general

revenue was suspended for six years.

In 1935-36 the Public Accounts Committee alarmed by the existing

condition, emphasised the need for overhauling the financial working of railways.

The Pope Committee (1932) recommended that surplus staff should be retrenched

to reduce the operating expenses and that a publicity bureau should be formed to

face competition from roadways. The committee also recommended the

amalgamation of railways for efficient administration. During 1936-40, 2080

kilometres of railway line was laid. In 1937, Burma was separated from India due

to which the total railway kilometreage was curtailed by 3200 kms.

2.3.9 The Second World War (1939 -19 47)

During the Second World War, Indian Railways were better equipped to

meet any emergency requirements. A large number of wagons was also used to

transport war materials. Road transport was affected very much during the Second

World War period due to the non-availability of vehicles and spare parts. Due to

the entry of Japan in the war the plying of coastal steamers and sailing vessels

became impossible and the whole pressure of traffic fell on railways. So they were

able to earn a huge profit.

54

2.3.10 The Railways during the Partition of Pakistan

The partition of Pakistan brought about severe communal unrest. A

substantial portion of Bengal Railways, Assam Railways and more than four fifth

of North Western Railways went over to Pakistan. Due to communal unrest the

migration of railway workers took place on a large scale. About 1,26,000 railway

workers living in Pakistan opted for India, but only 1,08,000 arrived here, and they

were absorbed and 83,000 railway workers migrated from India to Pakistan. Most

of the railway men who migrated to Pakistan were skilled workers and the

majority of workers who came to India were clerks. So operating Indian Railways

was found difficult.

2.4 INDIAN RAILWAYS AFTER INDEPENDENCE

Having passed through various phases since its introduction on April 16,

1853, railways in India entered a new era in 1947, when the country attained

independence. The country inherited a shattered railway system, which had borne

the adverse effects of the depression of 1930 and the onslaught of the Second

World War. Even though railways in India performed better during the Second

World War, a major part of the assets became obsolete and overused and so

required replacement. Further the partition of Pakistan led to division of assets and

manpower and dislocated the railway industry. In the wake of partition the

55

railways had to transport a large number of migrants from India to Pakistan and

vice-versa. During the first month of independence, Indian Railways transported

nearly 7,00,000 migrants and another 40,00,000 migrants during the following

year, despite great operational and other handicaps.

After partition the pattern and direction of rail traffic underwent a lot of

changes, particularly in the Northern, North Eastern and Western parts of the

country. The Assam railways in the North Eastern parts of the country had no link

with the rest of the country and 227kilometre long Assam railway line was

completed in 1950. The loss of Karachi and Lahore ports affected the traffic from

Jammu and Kashmir through Pathankot. It necessitated immediate construction of

Pathenkar-Mokertian railway line to connect Pathankot with Delhi. This 44

kilometre railway line was completed in April 7,1952.

The diversion of traffic put severe pressure on the Delhi-Bombay route and

also on the port of Bombay. It necessitated the development of another port on the

west coast of the country and the obvious choice was Kandla. Connecting Kandla

with Dessa started in January 1950 and the 274 kms long line was opened for

traffic in 1952.

2.4.1 Re-organisation of Indian Railways

When India became independent, there were 42 state-owned railways and

company-owned railways operating in the country. The Indian Railway Enquiry

56

Committee was set up in 1947, headed by Pandit Hriday Nath Kunzru. The

committee recommended regrouping of railway systems. But this could not be

done immediately, mainly due to the existence of separate princely states.

However after the integration of these princely states into United India,

reorganisation took place in 1951 and 1952, with the creation of six zonal railways

- Northern, Eastern, Northeastern, Southern, Western and Central. The

operational and administrative consideration necessitated a further reorganisation.

Between 1955 and 1966 three railway zones namely Southeastern, North-Frontier

and South central were created. In 1996 six additional railway zones were created.

Table 2.1 shows the railway zones and the headquarters of the zonal offices.

TABLE 2.1

Details of Railway Zones after Regrouping

SI. No. Zone Headquarters Constituent Divisions.

1. Central Railway Mumbai Bhusaval, Mumbai, Nagpur, Sholapur,Nanded, Pune

2. Western Railway Mumbai Vadodara, Ratlam, Rajkot, Bhavanagar,Ahamedabad \

3. Eastern Railway Kolkata Sealdah, Herusah, Asansot, Dhanbad,Mugal Surai.

4 Northern Railway Delhi Delhi, Ferozepur, Moradabad, Lucknow,

Ambala.

5. North-Eastern Gorakhpur Izatnagar, Lucknow, Varanasi,

Railway

6. Southern Railway Chennai Chennai, Paighat, Madurai, Trichy,Trivandrum.

7. South-Central Secundrabad Secundrabad, Hydrabad, Vijayawada,

Railway Gundoor.

8. North-Eastern Maligaon Kathirhat-Alipurdur, Lumding, Tensukia,

Railway Rangiya

9. South-Eastern Kolkata Chakradhapur-Adra, Khasagpur, B ilashpur,

Railway Ranchi.

10. North-Central Allahabad Jhansi, Allahabad, Singrauh,Agra.

11. North-Western Jaipur Jodhpur, Bikana, Kotta, Ajmer, Jaipur.

Railway

12. South-Western Bangalore Guntakal, Mysore, Bangalore, Hubli.

13. East-Central Hajipur Danapur, Malda, Sonepur, Samastipur.

14 West-Central Jabalpur Nagpur, Jabalpur, Bhopal, Raipur.

Railway

15 East coast Bhubaneswar Khurda, Waltair, Sambalpur.

Railway

Source: Year Books of Indian Railways

57

58

2.4.2 Railway Expenditure during Plan Period

From the First Plan onwards the gap between the expenditure planned by

the Indian Railways and the internal funds generated by the railways was met by

way of budgetary support from the central budget. The Railways were to pay a

fixed rate of dividend for the amount contributed by the central Government.

Table 2.2 shows the railway expenditure, amount generated from the internal

funds of the railways and the budgetary support by the Central Government.

TABLE 2.2

Financing of Railway Plan

(in crores)

Internal fundsCapital from Central

ExchequerPlan _______ __________ TotalAmount

Amount Percentage Amount Percentage

I Plan 280 66 142 34 422

II Plan 467 45 576 55 1043

III Plan 545 32 1140 68 1685

1966-69 320 42 442 .58 762

IV Plan 397 28 1031 72 1428

V Plan 384 25 1141 75 1525

1978-80 316 25 935 75 1251

VI Plan 2783 42 3802 58 6585

VII Plan 9609 58 6940 42 16549

1990-92 6820 67 3388 33 10208

VIII Plan 24991 77 7311 23 32302

1997-98 6402 76 2001 24 8403

1998-99 6469 78 1831 22 8300

Total 59783 66 30680 34 90463

Source: Status Paper on Indian Railways 27 May 1998

At

Me

It is clear from Table 2.2 that out of Rs.90, 463 crores spent up to 1998-99,

Rs.59, 783 crores was spent by the Railways from their internal funds and

Rs.30,680 crores was paid by the Central exchequer. During the First Plan period

the contribution by the central exchequer was low and it was only 34 per cent of

the expenditure of railways. The contribution gradually increased to 75 per cent in

the Fifth Plan period and remained at that level up to 1978-80 and during the Sixth

Plan it fell down to 58 per cent. The contribution from the central exchequer

further decreased to 23 per cent during the Seventh plan and in 1998-99 it was

only 22 per cent of the railway expenditure.

It is also evident from the Table 2.2 that the Central Government left the

Indian Railways gradually to raise their own funds for their development and

reduced the contribution from the Central Government. It is not good for a

developing country like India, where adequate infrastructure development is

necessary for the socio-economic development.

2.4.3 Borrowings by Indian Railways

Midway during the VII Plan the financial support by the Central

Government for the development of railways was reduced. Therefore the railway

department was compelled to go for borrowing. In 1986 Indian Railway Finance

Corporation (IRFC) was set up by the Indian Railways to raise fund from the

Me

market. The average cost of market borrowings is high and there is the obligation

of repayment also. The Indian Railways had to pay 22 per cent as service charges

in comparison to 7 per cent obligatory dividend on the budgetary support. The

borrowings by the Railway Finance Corporation imposed an increasing burden of

lease charges and the lease charges rose from Rs. 25 crores in1987-88 to Rs. 2392

crores in 1998-99. The actual borrowings during 1998-99 were only Rs.2404

crores and nearly 99.57 per cent of the amount borrowed in 1998-99 was used

only for payment of lease charges on the previous loan. Very shortly the lease

charges would tend to exceed the market borrowings level itself.

From 1994-95 resources have also been generated through private

investment schemes launched by the Indian Railways such as Own Your Wagon

Scheme [OYWS] and Build Own Lease and Transfer [BOLT] schemes. Under

Own Your Wagon Scheme the user of the railways is to fund the procurement of

wagons. The wagons are then leased to the railways on the condition that wagons

will be supplied to them whenever required by them. The response of the private

sector to OYWS has been encouraging. The funds mobilised through IRFC and

OYWS are used for supplementing the rolling stock. The BOLT scheme has also

been offered to the private parties to invest their fimds in railway assets.

62

Table 2.3 shows the generation of funds by Indian Railways through

Railway Finance Corporation, Own Your Wagon Scheme, Build Own Lease and

Transfer Scheme from the year 1987-88 to 1998- 99.

TABLE 2.3

Generation of Funds by Indian Railways from 1987-88 to 1998-99

Internal IRFC OYW BOLT

SourcesTotal

YearAmount

Amount per Amount Per Amount per Amount Per

cent cent cent cent

1987-88 1331 65 720 35 2051

1988-89 1586 66 800 34 2386

1989-90 1789 64 1000 36 2789

1990-91 2091 65 1092 35 3183

1991-92 2134 59 1503 41 3637

1992-93 2548 71 1025 29 3573

1993-94 4030 82 856 18 4886

1994-95 3582 82.2 745 17 34 0.8 4361

1995-96 4208 79 985 18.5 133 2.5 5326

1996-97 4462 65.2 1954 28.6 285 4.1 144 2.1 6845

1997-98 3419 53.4 2520 39.4 155 2.4 308 4.8 6402

1998-99 3800 58.8 2404 37.1 104 1.6 161 2.5 6469

Total 34980 67.4 15604 30.0 711 1.4 613 1.2 51908

(Rs.in crores)

Source: Status Paper on Indian Railways, 27 MY Ia.

63

It is clear from Table 2.3 that the borrowings by IRFC increased from 35

per cent of the railway funds in 1987-88 to 41 per cent of the railway funds in the

year 1991-92. Thereafter it decreased to 17 per cent during 1994-95 and again

increased to 39 per cent in 1997-98. Private Financing Schemes such as Own

Your Wagon Scheme, Build Own Lease and Transfer Schemes are not successful.

During the first three years of introducing the OYWS the funds generated was

gradually increasing at least by one per cent every year, but in 1998-99 it fell

down to one per cent of the railway funds. Under the BOLT scheme the amount

invested by private parties was 308 crores in 1997-98 and in the very next year

itself the investment came down to 161 crores.

The generation of railway fund from the internal source is seriously

affected by the fact that staff cost has been close to 50 per cent of the working

expenses and the position is now further aggravated by the implementation of the

Fifth Pay Commission's recommendations. As per the interim budget for

1998-99, the staff salaries accounted for 56 per cent of the total working expenses.

Unless the overall cost of borrowed capital from the central exchequer as

well as market borrowings is kept within the profitability level, it would inevitably

send the Indian Railways network into a debt trap like most of the railway network

in the developed world.

64

2.4.4 Payment to General Finance by the Railways

Railway finances have been separated from general finance since 1924-25.

Every year the Central exchequer allots some amount for the development of the

railways. In return for this financial support, Indian Railways used to pay a fixed

rate of one per cent on the amount allotted by the Central exchequer, and also 20

per cent of surplus profit of every year till 1949-50. From 1950-51 onwards

Railways were required to pay a dividend, the rate of which is determined by the

Railway Convention Committee from time to time. The first Railway Convention

Committee was constituted in 1949. This ad hoc committee reviews the rate of

dividend and other matters connected with Railway finance. The dividend liability

for any year in which Indian Railways do not have sufficient funds to pay the

dividend is considered as deferred liability. The rate of dividend payable by

Indian Railways to general finance is fixed at 7per cent of the capital contributed

by the Central Government till date 8 . Every year the Railways pay the dividend

to the Central Exchequer.

The Indian Railways also pay regularly a fixed amount towards grant in

lieu of passenger tax. Further every year a specific sum is paid to the Railway

Safety Works Fund. Table 2.4 shows the amount paid by Indian Railways to the

Central exchequer towards dividend on capital, grant in lieu of passenger tax, and

Railway Safety Works Fund.

65

TABLE 2.4

Payment by Indian Railways to Central Exchequer

(in crores)

Year Dividend Deferred Grant in lieu RailwayTotal 1payment dividend ofpassenger Safety Works

tax fund

1991-92 1005.5 74.5 23.1 2.9 1106.0

1992-93 1146.7 315.0 23.1 2.5 1487.3

1993-94 1270.5 - 23.1 2.5 1296.1

1994-95 1336.2 - 23.1 2.4 1361.7

1995-96 1238.8 - 23.1 2.6 1264.5

1996-97 1482.0 - 23.1 2.4 1507.5

1997-98 1520.1 - 23.1 2.4 1545.6

1998-99 1751.8 - 23.1 2.4 1777.3

Total 10751.6 389.5 184.8 20.1 11346.0

Source: Infrastructure: Centre for Monitoring Indian Economy -. Bombay.

Table 2.4 shows that during the period from 1991 to 1999, the payment

made by Indian Railways to the Central exchequer was Rs. 11, 346 crores, out of

which dividend payment amounted to Rs. 10, 751 .6crores. Arrears of dividend

were paid only during 1991-92 and 1992-93, and after 1993 there were no arrears

of dividend. Every year Rs.23. icrores was paid towards grant in lieu of passenger

tax. In the eight years ending with 1998-99,amount of Rs.20. icrores had been paid

towards Railway Safety Works Fund, which leads to an average of Rs.2.5crores

every year.

It is also clear from Table 2.4 that in 1991-92, payment by Indian Railways

to the Central exchequer was Rs. 1 106crores and it increased to Rs. 1777.3crores in

1998-99, leading to an increase of 60 per cent. At the same time the amount

allotted by central exchequer for the development of railways was Rs. 1, 83 icrores

in 1998-99. So it is clear that the Central Government fails to give importance for

the development of railways.

2.5 PERFORMANCE OF INDIAN RAILWAYS

Indian Railways is the second largest system in the world under the single

management. As on 31st march 2000, Indian Railways have 62,809 route

kilometres, carrying 4594 million passengers every year from and to 6995 railway

stations and 44545 million tonnes of goods, employing 15,78,400 permanent

workers.

During the period from 1950 to 1957 Indian Railways carried 89 per cent of

the total freight traffic of the country, which decreased to 40 per cent in 1995-96,

and it is expected that this may further come down to 35 per cent in future.

Similarly the share of Indian Railways in the total passenger traffic comes down

from 72 per cent in 1950-51 to 20 per cent in 1995-96.

67

Any evaluation of the overall performance of Indian Railways would be

incomplete without mentioning the dual task it has been performing. Like any

other commercial enterprise it has to maintain its financial viability, while as a

Governmental organization of a welfare state, it has to provide the transportation

services to the society at the least possible price. In 1995-96 alone the Indian

Railways suffered a loss of Rs.3 13 1 crores due to its social cost in carrying certain

commodities below cost, maintaining uneconomic branch lines and charging

heavily subsidised fares for suburban passenger service.

The performance of Indian Railways has been analysed by its route

kilometre, number of passenger trains, number of passengers carried, quantum of

goods carried, speed of passenger trains, number of accidents, social cost incurred,

number of regular workers and number of scheduled caste and scheduled tribe

workers.

2.5.1. Route Length in Indian Railways

Route length indicates the distance between two points on a railway line

treating all lines on the section as single line. The extra distance of multiple,

treble, etc. is taken as two or three or more as the case may be, in calculating

running track length.

68

One of the important characteristics of railway assets is that most of the

capital expenditure is sunk cost. This is mainly due to the construction of railway

lines. As on 31st March 1977, route kilometres of Indian Railways was 62,725

kms and track kilometres was 1,07,360. The total assets of Indian railway on 31st

March 1977 was Rs.55, 520.7crores of which Rs.44, 627.3 crores are block assets.

Out of the block assets, Rs. 19, 739. icrores was invested in the construction of

railway tracks and bridges. The capital expenditure on railway track represents

44.23 per cent of block assets and 35.55 per cent of total assets of the Indian

Railways. In the year 1997-98, 369.5 crores was spent on the construction of new

lines and in 1998-99 the amount was increased to 496.8 crores. Table 2.5 shows

the route length in different zones of the Indian Railways.

TABLE 2.5

Route Length in Different Zones of Indian Railways

1997-98 1998-99S1.No Zone

Kms Percentage Kms Percentage

1 Western 10013 16.02 10020 15.95

2 Central 7059 11.30 7062 11.24

3 South central 7120 11.39 7102 11.31

4 Southern 7010 11.22 7146 11.38

5 South — Eastern 7279 11.65 7432 11.83

6 Eastern 4228 6.77 4236 6.74

7 North — Eastern 5011 8.02 5018 7.99

8 North - East Frontier 3749 6.00 3767 6.00

9 Northern 11026 17.64 11026 17.55

Total 62495 100.00 62809 100.00

Source: Year Book of Indian Railways 1998 and 1999.

It is evident from Table 2.5 that Northern zone has the highest route length

in Indian Railways, (17.55% of the total route length), followed by Western

Railways having 15.95 per cent of the route length. Southern Railway has 11.38

per cent of the route length of Indian Railways and North-East Frontier Railway

accounts for 6 per cent of the route length.

70

The overall increase in route length in Indian Railways came to 2424 kms

during the last 25 years. The growth rate during 1974-1999 amounted to only 4

per cent and the annual growth rate was only 0.167 per cent, which is very low for

a developing country like India. In Southern Railways the route length decreased

by 412 kms during the last 25 years. So it is clear that Southern Railways are

being ignored in the case of construction of new railway lines. But in Central

Railways and South Central Railways, the route length increased by 1106 kins and

978 kms respectively during the last 25 years.

2.5.1.1. Gauge-wise Classification of Route Length

Indian Railways has three gauges of railway line namely broad gauge,

metre gauge and narrow gauge. In broad gauge the length between the two rails is

1.676 metre and in metre gauge one metre and in narrow gauge 0.762 metre. In

some areas the length of narrow gauge is 0.610 metre. Narrow gauge is used in

some hilly areas and areas in which the traffic is very light. The wagons and

coaches used in broad gauge are larger in size and capable of carrying more

number of passengers and more goods than wagons and coaches used in metre

gauge. The speed of the broad-gauge trains is also high, but the cost of laying

broad gauge lines is higher than that of metre gauge. So before Independence,

when Railways were in the hand of private companies, they preferred metre gauge.

But after Independence, considering the traffic of railways, Indian Railways took

71

efforts to convert the metre gauge lines into broad gauge lines. The broad gauge

carries 95 per cent of the total freight and 89 per cent of the total passenger traffic

in Indian Railways.

As on 31 March 2000, out of 62759 kms of Indian Railways broad gauge

lines cover 44383 kms, metre gauge lines cover 15013 kms and narrow gauge

lines cover 3363 kms.

2.5.2 Railway Electrification Projects

Electrification in the Indian Railways started 'in 1925, but remains confined

mainly to suburban traffic. First electric railway was opened in India on

5 February 1925 from Victoria Terminals (Mumbai) to Kurla. Since electric

traction provides pollution - free mode of transport with additional advantage of

increasing in line capacity, Indian Railways has been giving thrust to

electrification of high-density routes. Besides other advantages, this results in a

saving of about Rs.2, 500 crores of foreign exchange annually by way of saving in

diesel fuel. Table 2.6 shows the route kilometres electrified and non- electrified

and total route kilometres from 1950-51 to 1998-99.

TABLE 2.6

Growth of Electrification in Indian Railways

Electrified Non-electrifiedYearTotal

Route Percentage Route Percentage (Kms)kilometre kilometre

1950-51 388 0.73 53208 99.27 53596

IPlan 388 0.71 54623 99.29 55011

II Plan 748 1.30 55679 95.90 58399

III Plan 2423 4.10 55976 95.90 58399

IV Plan 4199 7.00 56035 93.00 60234

V Plan 4720 7.80 55973 92.20 60693

VI Plan 6325 10.20 55525 89.80 61850

VII Plan 9100 14.60 53111 85.40 62211

VIII Plan 13517 21.50 49212 78.50 62729

1998-99 13962 22.00 48847 78.00 62809

Source: Infrastructure: Centre for Monitoring Indian Economy.

From Table 2.6 it could be inferred that till the end of First plan the

electrified route kilometre was just 388, which increased to 748 by the end of II

Plan and in 1998-99 electrified route kilometre was increased to 13,962 registering

an increase of 35 times more than in 1950-5 1. The non-electrified route kilometre

was 53,208 in 1950-51 and it gradually increased to 56,035 kilometre during IV

Plan. From IV Plan onwards non-electrified route kilometre gradually declined

72

73

and by the end of VIII Plan it came down to 49,212 kms. During 1998-99 out of

the total route kilometre of 62,809 electrified route kilometre accounted for 22 per

cent having 13,962 route kilometre and non-electrified route kilometre accounted

for 78 per cent of the total route kilometre having 48,847 kms.

2.5.3 Locomotives in Indian Railways

Indian Railways use three types of locomotives, namely, steam, diesel, and

electric. In steam locomotives there is waste of heat energy, coal and time. If the

quality of coal is not good the operating efficiency is considerably lowered.

Diesel locomotives are generally used to give continuous service for pulling

heavier loads at high speed and operating successfully on congested lines. Their

operating cost is lower than steam locomotives, but the maintenance cost of diesel

locomotives is high. Electric locomotives have the advantage of higher average

speed, comparative independence of human element, clean operation,

improvement of public health due to elimination of smoke nuisance, cutting out

haults for watering and servicing, increased frequency of trains, and reduction in

operating cost. Electric operation works out cheaper, since electric power is

produced at low cost either from poor quality coal or from dam water or river

water. The Indian Railway Enquiry Committee 1947 estimated that an electric

locomotive is capable of doubling the annual mileage of steam locomotives. The

annual maintenance cost of electric locomotive is much lower than that of steam

74

locomotives, largely due to absence of boiler or reciprocatary parts, which are

subjected to heavy wear and tear. But electrification requires high capital

investment for the establishment of electric traction. Table 2.7 shows the position

of different types of locomotives in Indian Railways from 1950-51 to 1995-1996.

TABLE. 2.7

Position of locomotives in Indian Railways

Steam locomotive Diesel locomotive Electric locomotive

Year TotalNumber Percentage Number Percentage Number Percentage Number

1950-51 8120 98.9 17 0.2 72 0.9 8209

1960-61 10312 97 181 1.7 131 1.3 10624

1970-71 9387 84 1169 10 602 6 11158

1980-81 9469 684 2403 22 1036 9.5 12908

1990-91 2915 34.6 3759 44.7 1743 20.7 8417

1994-95 358 5 4259 61 2302 34 6919

1995-96 209 3 4313 62 2387 35 6909

1996-97 85 1.2 4363 62.6 2527 36.2 6975

1997-98 64 0.8 4496 62.4 2646 36.8 7206

1998-99 58 0.8 4586 61.7 2785 37.5 7429

Source: Centre for Monitoring Indian Economy..

It is clear from Table 2.7 that the number of steam locomotives was higher

in 1950-51 and it accounted for 98.9 per cent of the total number of locomotives.

In the year 1960-61 the number of steam locomotives suddenly increased, because

75

the Chittaranjan locomotive works, Chittaranjan in West Bengal started production

of steam locomotives in November 1960. From 1970-71 onwards, the number of

steam locomotives declined gradually and in 1998-99 the total number of steam

locomotives was 58, constituting only 0.8 per cent of the total number of

locomotives.

In 1950-51 the number of diesel locomotives was just 17 constituting only

0.2 per cent of the total number of wagons. It started increasing from the year

1970-71, because Diesel Locomotives Works of Varanasi started production in

1964. In 1998-99 the number of diesel locomotives increased to 4586 constituting

the major share of 61.7 per cent of total locomotives. In 1950-5 1 the number of

electric locomotives was also very low amounting to 72 locomotives constituting

0.9 per cent of the total number of locomotives. Since electrification was

undertaken heavily from 1990-91 the number of electric locomotives also

increased and in 1998-99, it came to 2785 constituting 37.5 per cent of

locomotives. The total number of locomotives is gradually declining from 1970-71

onwards due to the elimination of steam locomotives.

2.5.4 Cross Subsidisation of Passengers by Freight Service

Indian Railways run trains for passenger traffic as well as for goods traffic.

The number of goods train run by Indian Railways is low as compared to the

76

passenger trains but the revenue collected from goods tram is high as compared to

revenue collected from passenger traffic. The ratio of trains run for passenger

traffic and for goods traffic is 60:40 but the revenue contributed is in the ratio of

28:72. It leads to cross subsidisation of passengers by freight service. Table 2.8

shows the revenue from goods traffic and passenger traffic.

TABLE 2.8

Earnings from Goods Traffic and Passenger Traffic (in crores)

Goods traffic Passenger traffic

Year Total AmountAmount Percentage Amount Percentage

1991-92 9462.1 72.0 3684.1 28.0 13146.2

1992-93 10903.0 71.6 4315.1 28.4 15218.1

1993-94 12557.4 72.0 4895.2 28.0 17452.6

1994-95 13669.7 71.4 5463.7 28.6 19133.4

1995-96 15290.4 71.4 6124.5 28.6 21414.9

1996-97 16668.9 71.5 6632.5 28.5 23301.4

1997-98 19885.9 72.5 7534.4 27.5 27420.3

1998-99 21682.0 72.2 8368.0 27.8 30050.0

Total 120119.4 71.9 47017.5 28.1 167136.4

Source: Infrastructure. Centre for Monitoring Indian Economy

From Table 2.8 it is clear that during the period from 1991 to 1999, the

total traffic collection amounted to Rs. 1, 67, 136.4 crores, out of which revenue

77

from goods traffic amounted to Rs. 1, 20, 119.4 crores, which came to 71.9

per cent of the total revenue collection. Passenger traffic contributed only

Rs. 47, 017.5 crores contributing only 28.1 per cent of the total revenue collection.

This position was constant during the period from 1991 to 1997.

2.5.5 Goods Transported through Indian Railways

For meeting the daily needs of the people, Railways early a large variety of

goods including consumer goods, raw materials for industries and finished

products. Most of the bulk commodities like coal, iron and other ores, steel,

cement, food grains, fertilizers and petroleum products are transported through

railways. About 90 per cent of the country's coal is moved through rail. The steel

industry depends entirely upon the rail transport for the movement of raw

materials and finished products. The Railways lose money every time it moves

food grains from supply points to scarcity areas at subsidised rates. In railways a

number of commodities like iron ore, limestone, salt, food grains, fruits and

vegetables, sugarcane, wood, and coal are treated as low rated commodities and

freight rates charged on them do not cover cost or do so barely. High rated

commodities such as chemicals, yarn and machinery pay much of the freight rate

so as to yield a surplus over cost. Table 2.9 shows the revenue collections from

different goods.

78

TABLE 2.9

Revenue Earnings from Freight Traffic of Major Goods

(in crores)

1996-97 1997-98 1998-99

Type of Goods Amount Percentage Amount Percentage Amount Percentage

Coal 7322 43.8 8779 44.1 9489 43.8

Iron and steel 2625 15.5 3308 15.7 3691 16.3

Cement 1312 7.9 1562 7.9 1750 8.0

Food grains 1273 7.6 1512 7.6 1623 7.5

Fertilizers 638 3.8 757 3.8 811 3.7

Petroleum 2031 12.2 2397 12.1 2633 12.1products

Other goods 1497 9.2 1771 8.8 1899 8.6

Total 16698 100 20086 100 21896 100

Source: Infrastructure: Centre for Monitoring Indian Economy

It is clear from Table 2.9 that the revenue from goods traffic is gradually

increasing every year, and there is no remarkable change in the types of goods

carried by Indian Railways. Coal is the major item, which contributed nearly 43

per cent of the revenue from goods traffic. Iron ore and petroleum products

contributed 16 per cent and 12 per cent of the revenue from goods traffic. The

revenue from other goods is gradually declining and this indicates that railways

79

could take steps to attract the revenue from other goods like chemicals, salt,

limestone, fruits, vegetables and timber.

2.5.6 Revenue from Different Zones

For the purpose of efficient administration Indian Railways are divided into

different regions. In India there are certain regions like northeast area, which are

industrially backward and so naturally the goods traffic in such regions are less.

In metropolitan cities the receipts from passenger traffic is more. To verify this an

analysis of revenue from passenger traffic and revenue from goods traffic from

different zones is made. Table 2.10 shows the revenue from both passenger traffic

and goods traffic during the year 1998-99.

TABLE 2.10Revenue from Goods Traffic and Passenger Traffic from Different Zones

vuring 1998-99

Goods Traffic Passenger Traffic TotalRailway Zones

AmountAmount Percentage Amount Percentage

Western Railway 3049.1 68 1435.2 3.2 4484.3

Central Railway 3067.4 64.5 1685 35.5 4752.4

South Central Railway 2276.8 76 722.3 24 2999.1

South Railway 1213.3 58.8 849.9 42.2 2063.2

South-Eastern Railway 5384.9 91 537.2 9 5922.1

Eastern Railway 2611.2 75 876.4 25 3487.6

North - Eastern 285.7 39 450.3 61 736Railway

North frontier RaiJway 304.3 65 166.4 35 470.7

Northern Railway 3493.3 68 1624.2 32 5117.5

Total 21686 72 8346.9 28 30032.9

Source: Infrastructure Center for Monitoring Indian Economy

It is clear from Table 2.10 that the revenue from goods traffic and

passenger traffic is in the ratio of 72:28. Regarding revenue from goods traffic

South Eastern Railways contributes more than other zones of railways. In

Southeastern zone the revenue from the passenger traffic is the least and it

amounts to nine per cent of the revenue and remaining 91. per cent of the revenue

is from goods traffic. In North Eastern zone, the revenue from goods traffic is the

81

least, contributing 39 per cent of the revenue from that region and the remaining

61 per cent of the revenue is from passenger traffic. In Southern Railways the

ratio of revenue from goods traffic to passenger traffic is 58:42.

2.5.7 Passenger Traffic in Indian Railways

There has been an impressive increase in the volume of passenger traffic

both in terms of the number of passengers travelled, the number of passenger

kilometres, which is the product of the number of passengers carried and average

distance travelled by them. Despite constraint in resources, the railways have been

able to cope with the increasing demand for passenger traffic. Various expert

bodies like the National Transport Policy Committee, Railway Reforms

Committee and Rail Tariff Committee have recommended that railways should

mainly concentrate on meeting the demand of medium and long distance

passenger traffic leaving short distance, slow moving traffic to be carried by road.

Such an integrated transport policy will be beneficial to the society as roadways

cany short distance traffic more economically.

In Indian Railways, telescopic rate was introduced in April 1, 1955 and it is

still followed. According to this system if the distance travelled by train increases,

the rate per kilometre will decrease. If a passenger travels 100 kms in I class in an

express train, he is to pay Rs 158, the average rate per kms is Rs. 1.58, and if the

distance increases to 1000 kms, then the fare will be Rs.917, the average rate per

82

km being Re.0.914 and if the distance increased to 5000 kms the fare will be

Rs. 3028, the average rate per km will come down to Re.0.605. So travel by

railway is cheaper for long distance travellers. Table 2.11 shows the passenger

traffic, the number of passengers travelled and the average lead.

TABLE 2.11

Passenger Traffic in Indian Railways

Passengers (Millions) Passenger kilometres Average lead

Year (Millions)

PercentageNo. Kilo Percentage Kilo PercentageIncrease

metres Increase metres increase

1970-71 2431 - 118120 - 48.6 -

1980-81 3612 48.6 208558 76.6 57.7 18.7

1990-91 3880 7.4 295790 41.8 76.2 32

1991-92 4073 4.8 314717 6.3 77.3 1.4

1992-93 3765 (-7.6) 300202 (46) 79.7 3.1

1993-94 3724 (-1) 296347 (-1.3) 79.6 (-0.1)

1994-95 3934 5.6 319491 7.8 81.2 2

1995-96 4061 3.2 342359 7.2 84.3 3.8

1996-97 4216 3.8 357574 4.4 84.8 0.5

1997-98 4382 3.9 371296 3.8 84.7 (-0.1)

1998-99 4531 3.4 389740 5.0 86 1.54

Source: Infrastructure: Centre for Monitoring Indian Economy.

83

Table 2. 11 shows that there has been impressive increase in the volume of

passenger traffic both in terms of the number of passengers travelled and the

average distance travelled, which automatically leads to an increase in passenger

kilometre. The number of passengers travelled was 3880 million during 1990-91

and it increased to 453 imillion during 1998-99. This shows that there was a

steady increase in passenger traffic except during the years 1992-93 and 1993-94,

and there was a decrease in the number of passengers travelled during these two

years. A similar trend can be seen in passenger kilometres also. The average lead

or the average distance travelled by passengers also gradually increases except a

very insignificant decrease during 1993-94 and 1997-98. The average distance

travelled was 76.2 kilometres during 1990-91 and it increased to 86 kilometres

during 1998-99. In the year 1970-71 the average distance travelled was only 48.6

kilometres. The increasing trend in average lead of passenger traffic shows that

passengers travelling long distances prefer railways.

2.5.8 Sub-urban and Non Sub-urban Traffic

Passenger traffic can be classified into sub-urban and non sub-urban. The

category of sub-urban passengers includes passengers around the metropolitan

cities of Mumbai, Kolkatta and Chennai, which account for nearly 62.8 per cent of

the number of passengers. The sub-urban service suffers a loss of about Rs-217

crores per year.

The loss is mainly due to highly concessional season tickets. The daily

users of the railway like students, office goers and vendors in trains can get

monthly and quarterly season tickets and they can avail of this facility both for

first class and second class.

The following varieties of services are available in non sub-urban trains.

+ AC First class

•• AC Sleeper class

•. First class (Mail and Express)

•:• First class (ordinary)

+ Sleeper class (Mail and Express)

+ Second class (Mail and Express)

+ Sleeper class (ordinary)

Second class (ordinary)

+ AC chair car.

Table 2.12 shows the number of passengers travelled in sub-urban and non-

sub-urban areas, passenger kilometre, average distance travelled by passengers,

and earnings from both suburban and non sub-urban traffic and the earnings per

passenger kilometre in both the areas of railways.

85

TABLE 2.12Sub-urban and Non Sub-urban Traffic in Indian Railways

No. of Passengers Passenger kilometres Earnings(millions) (millions) (crores)

Year I

Sub-urban Sub-urban

Non Sub-urban Non Non

sub-urban Sub-urban Sub-urban

1994-95 2449.72 1484.66 68115 251376 650.55 4813.11

(62.3%) (37.7%) (21.32) (78.68) (11.9%) (88.1%)

1995-96 2527.02 1533.77 73651 268708 748.27 5376.22

(62.2%) (37.8%) (21.51) (78.49) (12.2%) (87.8%)

1996-97 2640.92 1574.84 77104 280470 841.63 5791.61

(62.6%) (37.4%) (21.54) (78.46) (12.7%) (87.3%)

1997-98 2720 1662 79789 291512 960.18 6574.19

(62%) (37.9%) (21.49) (78.51) (12.7%) (87.3%)

1998-99 2802 1729 83589 306151 1059 7309

(61.8%) (38.2%) (21.45) (78.55) (12.7)% (87.3%)

Total 13139.66 7984.27 I 382248 1398217 4259163 29864.13

(62.2) (37.8%) (21.47) (78.53) (12.5%) (87.5%)

Source: Infrastructure: Centre for Monitoring Indian Economy.

Table 2.12 shows clearly that 62.2 per cent of the passengers travelling in

suburban areas contributed only 12.5 per cent of the earnings of Indian Railways,

but 37.8 per cent passengers from non suburban traffic contributed 87.5 per cent of

the earnings. The increase in number of passengers, passenger kilometres and

earnings from both suburban and non-suburban areas shows a steady increase year

M

by year. The earnings per passenger kilometre from sub-urban passengers is only

11.07 paise as against 21.23 paise from non sub-urban passengers.

The lower earnings from sub-urban traffic is mainly due to the commuters,

who avail monthly and quarterly season tickets, the rates of which are very less

and the lower average distance travelled by commuters, as compared to the non

sub-urban passengers.

2.5.9 Amenities to Passengers

The Indian Railways have been following a systematic policy of improving

the comforts of railway users for the last several years. Every year definite

programmes are chalked out and certain amounts are allotted to be spent for

providing passenger amenities. The facilities available at stations include medical

shops, tourist information centres, post and telegraph office, public telephones,

computerised reservation facilities, retiring rooms, waiting rooms, refreshment

rooms, light refreshment stalls and book stalls. Major railway stations have

cloakrooms and lockers where luggages can be kept up to one month, on payment

of a prescribed charge. Another passenger amenity provided at several important

stations is AC and non-AC retiring rooms and dormitories. Wheel chairs and

stretchers are available at certain stations and can be obtained from the

87

stationmaster. Cycle sheds and car-parking stands are provided at major railway

stations as an amenity to the travelling passengers.

Catering facilities are available at most stations as well as on important

long distance and inter city trains. Southern Railway provides bedrolls, in select

overnight services for the benefits of passengers. Bedrolls are provided free of

cost to passengers travelling in AC first class, AC-2 tier sleeper and AC-3-tier

sleeper coaches. The passengers travelling by first class can avail themselves of

the facility on payment of Rs.20 per bedroll, per journey. A first aid box is

available with all stationmasters and also with the guards of each train, who are

trained in rendering first aid.

Table 2.13 shows the amount spent by different zones of Indian Railways

for providing amenities to passengers from the year 1993-94 to 1998-99.

MOO

TABLE 2.13Expenditure on Amenities of Passengers by Indian Railways

(Rs. in crores)

Zones 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99

Western Railway 8.00 5.22 9.30 13.90 12.31 17.82

Central Railway 7.00 8.07 13.33 19.65 12.15 17.09

South Central 6.00 4.23 7.70 8.82 4.45 9,26Railway

Southern 6.50 8.00 11.54 15.74 8.08 9.61Railway

South-Eastern 9.00 16.19 12.98 14.50 8.32 11.49Railways

Eastern 9.00 8.04 10.47 13.17 6.41 5.32

Railways

North-Eastern 3.00 1.36 4.00 5.40 4.23 7.42

Railways

North-East 4.50 2.51 5.00 6.06 5.21 5.14

FrontiersRailway

Northern 7.00 6.38 15.67 22.75 18.84 16.85

Railway

Total 60.00 60.00 90.00 120.00 80.00 100.00

Source: Infrastructure: Centre for Monitoring Indian Economy.

From Table 2.13 it is clear that every year Indian Railways spend certain

amount for providing amenities for passengers. In the year 1993-94 Indian

Railways spent 60 crores for providing amenities for the passengers and during

1996-97 Rs. 120 crores was spent. During the year 1998-99 the amount set aside

for providing amenities for passengers was Rs. 100 crores.

2.5.1ONumber of Passenger Trains

Indian Railways run different types of passenger trains for the benefit of

passengers, belonging to various groups based on income. In sub-urban area

Electric Multiple Unit trains are run, mostly on electrified routes. Mostly

commuters having monthly or quarterly season tickets use such trains.

Mail/Express trains are run for the benefit of long distance passengers. The fare in

such trains is higher than that of passenger trains and the speed of Mail/Express

trains is more, having limited stoppings. Passenger trains are run in non- suburban

area and passenger trains have stoppings in almost all the stations. Rajadhani and

Shatabdi trains are run between important cities and such trains have a separate all

inclusive fare structure, including catering charges. All the coaches in Rajadhani

and Shatabdi trains are air conditioned with channel music and public address

system and delicious and wholesome food is served at the seats or berths of

passengers. The number of trains that could be run depends upon availability of

coaches, line capacity and demand for passenger traffic. Table 2.14 shows the

daily average number of trains run by Indian Railways.

VATA

TABLE 2.14

Daily Average Number of Passenger Trains.

Year EMU Trains Mail/ Express Mixed Passenger Total

Trains Trains Trains

1976-77 2447 619 2865 5931 11862

1986-87 3036 906 2692 6904 13538

1990-91 3310 1056 2945 7311 14622

1991-92 3286 1085 2913 7284 14568

1992-93 3291 1116 2861 7268 14536

1993-94 3342 1166 2848 7356 14712

1994-95 3373 1223 2928 7529 15053

1995-96 3315 1237 2973 7525 15050

1996-97 3472 1306 3121 7899 15798

Source: Infrastructure, Centre for Monitoring Indian Economy.

It is clear from Table 2.14 that every year there is a steady increase in the

number of Mail and Express trains. The change in the number of total trains,

electric multiple unit (EMU) trains, mixed trains and passenger trains are not

significant, except during 1996-97. In 1991-92 the number of trains other than

Mail/Express trains came down compared to 1990-91. The increase in

Mail/Express trains shows that the demands of long distance passengers had been

satisfied by Indian Railways, and of course it may be remunerative for Indian

91

Railways to run Mail' Express trains, because the fare in mail express trains is

high as compared to other trains.

2.5.11 Speed of Passenger Trains

Speed is one of the criteria while selecting a mode of transport by a

passenger. All over the world there is a wild search for faster and faster trains. The

speed of the trains is governed by various factors like curves and bridge's, brake

power, signaling, condition of track, gross load, density of traffic and halting time

at stations. Indian Railways spend a huge amount every year for doubling or multi-

lines, through which the speed of the train can be improved. During the year

1998-99, Rs 500 crores has been spent for doubling the existing lines. Table 2.15

shows the speed of passenger trains both in broad gauge and metre gauge.

92

TABLE 2.15

Speed of Passenger Trains in India

(kms per hour)

Broad gauge Metre gauge

YearMail! EMU Passenger Mixed Mail! EMU Passenger Mixed

Express Trains Trains Trains Express Trains Trains Trains

1976-77 47.1 34.3 28.0 26.1 36.8 32.6 26.1 18.2

1986-87 47.1 33.5 27.3 24.3 36 36.5 25.8 18.3

1990-91 47.6 33.7 28.2 25.0 36.9 37.1 25.6 18.2

1991-92 47.3 33.9 28.4 24.6 36.4 37.1 25.5 18.9

1992-93 46.4 34.2 29.0 25.4 36.2 37.1 25.5 19.4

1993-94 46.3 34.4 29.8 26.6 37.0 33.2 26.2 19.7

1994-95 46.7 35.0 30.7 27.7 36.8 36.0 27.5 20.7

1995-96 47.9 35.6 31.8 26.6 37.6 36.0 27.7 23.2

1996-97 47.8 35.9 31.7 24.3 36.8 36.0 27.8 18.9

1997-98 47.8 38.1 30.0 23.6 37.2 36.0 27.8 26

1998-99 46 37.7 32.2 23.9 36.4 36.0 28.0 25.7

Source: Centre for Monitoring Indian Economy.

It is evident from Table 2.15 that the trains run on broad gauge lines are

speedier than the trains on metre gauge lines. In broad gauge the average speed of

Mail/Express trains was 47.1 KMSPH (kilometers per hour) during 1976-77, and

it was increased only by 0.7KMSPH during the twenty years. The speed of

passenger trains was increased from 28 KMSPH in 1976-77 to 32.2 KMSPH in

1998-99. The speed of mixed trains on broad gauge had come down considerably.

It declined from 26 KMSPH in 1976-77 to 23.9KMSPH in 1998-99. On metre

gauge there is no change in the speed of Mail/Express trains, but the speed of

EMU trains was considerably increased from 32.6KMSPH in 976-77 to

36KMSPH in 1998-99.

The speed of Indian trains has not been increased considerably during the

last 24 years in spite of the improvement in technology. The speed of the trains run

in broad gauge is more than that of trains run on metre gauge and so gauge

conversion may be resorted to improve speed in Indian Railways.

2.5.12 Annual Social Cost

While discharging social obligations Indian Railways incur losses as noted

below :

• Loss on transport of essential commodities carried at lower rate below cost.

• Loss on passenger and other coaching services.

• Loss on uneconomic branch lines.

• Loss on suburban coaching service.

Table 2.16 shows the loss incurred by Indian Railways or the social cost

spent by Indian Railways under different headings.

TABLE 2.16Annual Social Cost in Indian Railways

(Rs in crores)

Year Commodity Non- suburban Sub-urban Uneconomic TotalMovement Coaches Coaches branch lines

1974-75 45.6 134.70 18.80 14.29 213.40

1984-85 173.60 819.12 76.22 67.40 1136.34

1990-91 405.75 1588.56 207.31 109.00 2310.62

1991-92 322.77 1563.21 212.69 123.00 2221.67

1992-93 250.17 1743.66 215.67 140.00 2349.50

1993-94 65.42 1635.60 205.44 146.00 2052.46

1994-95 46.66 1716.25 210.89 166.00 2139.80

1995-96 43.08 1812.89 250.85 184.00 2290.82

1996-97 71.55 2599.50 216.68 243.67 3131.4

1997-98 93.95 3953.37 359.57 325.00 4731.89

1998-99 110.17 3792.17 373.33 328.00 4603.67

Source: Centre for Monitoring Indian Economy.

It is clear from Table 2.16 that the Indian Railways spent huge amount as

social cost. The social cost incurred on the movement of commodities declined

after the year 1993-94, but the expenditure on other heads of non-suburban

coaches, suburban coaches and uneconomic branch lines had been increasing

gradually.

95

It is an accepted principle in all developed countries that the Government

compensates such losses. The quantum of subsidy received in Swiss, German and

French Railways are shown in Table 2.17.

TABLE 2.17

Subsidy to Railways in Different Countries

P I Percentage

S1. No. Railway Currency in million revenueSubsidy Total

qfssidyin revenue

1. Swiss Federal Railway SWFR 2394 6767 35.38

2. German Railway DM 8700 24401 30.03

3. French National Railway F.Fr 20165 67149 30.03

Source:White Paper on Railway Projects: Ministry of Railways.

It is clear from Table 2.17 that in certain countries the railways receive

subsidy for the social cost incurred by them. But in India no such subsidy is paid

to Indian Railways.

2.5.13 Railway Accidents

Indian Railways maintains a standard for safety of passenger, which can be

compared favourably with that of road transport. Yet several accidents take place

every year. Some accidents take place due to collisions between two trains, which

are allowed to enter the same block section without giving prior permission to

FM

approach. Some accidents occur due to derailment. Derailment may be due to

railway line being tampered with by unknown persons or due to weak railway

bridges. Some accidents occur due to the carelessness by road users at unmanned

level crossings. Table 2.18 shows the number of railway accidents and the number

of persons killed in rail accidents.

TABLE 2.18

Accidents in Indian Railways

Compensation Damage to Interruption toYear Persons Persons paid Properties Communication

killed (No) injured (Rs. lakhs) (Rs. lakhs) (Hours)

1989-90 146 662 54 1344 8987

1990-91 220 595 229 3873 10041

1991-92 98 451 276 1914 6382

1992-93 96 467 237 4266 6006

1993-94 179 446 178 2606 6018

1994-95 84 434 177 3450 4709

1995-96 406 681 536 4421 6661

1996-97 83 237 709 3119 5289

1997-98 171 747 241 3292 4526

1998-99 280 615 490 4710 10805

Source: Infrastructure: Centre for Monitoring Indian Economy

97

It is clear from Table 2.18 that there are frequent changes in the number of

persons killed, during some years. In some severe accidents the number of death is

more. It is also clear that the amount of compensation paid has increased

considerably. The accidents can be reduced by launching of an intensive safety-

orientation drive among the operating categories of railway staff, deployment of

additional engineering aids to safeguard against human failure, prompt enquires

followed by quick and deterrent punishment and rewarding railway staff who are

alert.

2.5.14 Man Power in Indian Railways

Providing employment is an important responsibility for any Government

and Indian Railways is the largest employer providing employment to 15,77,200

people. This figure is confined to permanent staff working in railway

administration. Besides, Indian Railways provides temporary employment for

thousands of people during times of construction of new lines, bridges, gauge

conversion and doubling of railway lines. The railway staff can be classified into

four categories such as A, B, C and D. Table 2.19 shows the number of staff in

Indian Railways and the amount spent on salaries.

TABLE 2.19

Employment in Indian Railways

Group A Group C Group D Total SalariesYear and B (No in (No in (No in (Ri. in

(No in Lakhs) Lakhs) Lakhi) lakhs) Crores)

1950-51 2.3 223.5 687.8 913.6 113.8

1960-61 4.4 463.1 689.5 1157.0 205.2

1970-71 8.1 583.2 782.9 1374.2 459.9

1980-81 11.2 721.2 839.9 1572.2 1316.7

1990-91 14.3 891.4 746.1 1651.8 5166.3

1995-96 13.7 891.9 681.1 1586.7 9363.0

1996-97 13.9 902.4 667.3 1583.6 10514.5

1997-98 14.1 893.9 670.8 1578.8 14140.9

1998-99 14.6 900 663.8 1578.4 15610.6

1999-2000 14.6 908.6 654.0 1577.2 . 16288.7

Source: Railway Year Book 2000.

From Table 2.19 it is clear that the amount spent by Indian Railways in the

form of salaries to its employees was increasing every year considerably. In the

year 1990-91 the number of workers being 1651.8 lakhs and the amount paid to

them was Rs 5166 crores. But in the year 1995-96 the number of employees

declined to 1586.7 lakhs, the amount paid as salaries increased to Rs.9363 crores.

MOOrM

It is also clear from Table 2.19 that there were no considerable changes in

the number of workers in group D during the past 45 years, but the number of

group A, group B and group C workers increased considerably. The number of

group D workers in 1950-51 was 687.8 lakhs but it declined to 654 Iakhs even

after 50 years. On the other hand the number of workers in group C increased to

four times than in 1950-51 and the number of group A and B workers increased to

six times than in 1950-51.

2.5.15 Employment of SC/ST Workers

For uplifting the socially depressed and suppressed sections of the people,

the Government of India follows a reservation policy in providing employment. In

all sectors scheduled caste workers should be at least 15 per cent of the total

number of workers and scheduled tribe workers should be at least 7.5 per cent of

the total number of workers. Table 2.20 shows the number of employees

belonging to scheduled caste and scheduled tribe in different categories.

100

TABLE 2.20

Employment of S.CIS.T Workers in Indian Railways 1999-2000

Scheduled Caste Workers Scheduled Tribe Workers

Group Number Percentage to Number Percentage toTotal Total

Group A 1,180 15.22 514 6.59

Group 997 14.33 363 5.22

Group C 1,30,906 14.36 54,125 5.94

Group D(including 92,636 15.51 41,888 7.01Safaiwalas)

GroupD (Safaiwalas) 36,090 62.85 2,882 5.02

Total 2,63,809 16.56 99,772 6.31

Source: Year Book of Indian Railways 1999-2000.

(Safaiwalas refers to the category of workers engaged in the work of cleaning)

It is evident from Table 2.20 that the number of scheduled caste workers in

Indian Railways during the year 1999-2000 came to 16.56 per cent of the total

number of workers and this is more than the reservation stipulated by the Indian

Government. The number of scheduled tribe workers, in 1999-2000 came to 6.31

per cent. This shows that Indian Railways are also keen on providing natural

justice to the suppressed sections of the public.

2.6 RECENT TRENDS IN INDIAN RAILWAYS

Due to the declining financial support over the Plan period, and the

difficulty in raising internal generation of resources beyond a certain limit, mainly

due to the ever-increasing lease charges payable for Indian Railways Finance

Corporation, and the Government control over the tariff structure, the Indian

Railways has adopted a number of incentives to attract private investments in

railways. For increasing the revenue and reducing the operating cost, Indian

Railways slowly adopted privatisation. The main areas of private participation in

railways are manning of unmanned level crossings, train halt system in small

uneconomic stations, leasing vehicle sheds, catering centres, providing bed-rolls in

railway compartments, and allowing commercial advertisements in railway

coaches and wagons.

2.6.1 Konkan Railway Corporation

The Konkan Railway Corporation was set up to construct and operate the

broad gauge line of 760 kilometers long, between Roha in Maharastra and

Mangalore in Karnataka. Konkan Railway Corporation is a Government company

with 51 per cent equity participation from the Government of India through

101

Ministry of Railways. The balance share capital of 49 per cent is contributed by

102

the State Government of Maharastra (22 per cent), Goa (6 per cent), Kerala (6 per

cent) and Karnataka (15 per cent). The cost of the projects is Rs.3060crores. The

construction of Konkan Railway proved to be the biggest and more difficult

railway engineering projects in South Asia. It involved 2000 bridges and 91

tunnels, one of them being 6.5 kms long, the longest ever built in the country. The

first train on the 760 kms long track passing through the states of Maharastra, Goa,

Karnataka, and Kerala was flagged off on Jan 26, 1998, the Republic day of India.

The railway line constructed by Konkan Railway Corporation would considerably

reduce the journey time from Mumbai to Manglore, Cochin and Goa.

Freight rates in Konkan Railway Corporation is 50 per cent higher than that

of rates charged by other railways for similar distance. The passenger fare too is

higher by 40 per cent because travelling through Konkan Railway Corporation

reduces the journey time. The financial result of Konkan Railway Corporation is

less than the expected one. For increasing the revenue, they have planned to

introduce" Konkan Star Service" with modem facilities for passengers and" Roll-

on-Roll-off' freight service under which the loaded goods trucks are carried by

railways to the destination.

2.6.2 Commercial Utilisation of Land

Railways own 4.19 lakhs hectares of land of which 3.3 lakhs hectares of

land is used for locating operational and service enterprises such as tracks, railway

103

stations, workshops and colonies. About 25,000 hectares of land or 6 per cent of

total land holding of Indian Railways is vacant. Indian Railways plan to utilise

these lands commercially for the construction of hotels, passenger's terminals and

freight terminals.

2.6.3 Private Ownership of Tourist Trains

For promoting tourism in India, Indian Railways invited global bids for

ownership, marketing and management of tourist trains. The railways will provide

all ground facilities and infrastructure relating to the running of these trains

including locomotives, train crew, the use of existing signalling and

communication system and railway stations. The operators have to provide

catering on board/ground, entertainment on board/ground and surface transport for

sight seeing.

2.6.4 Maintenance of Railway Stations

The beautification and maintenance of 23 railway stations have been

handed over to private parties. In return the company is allowed to make their

own advertisements at the premises of the concerned railway stations.

2.6.5 Special Freight Trains

Indian Railways have introduced special freight trains, which run according

to a regular timetable. This service provides much-needed boost to non-bulk

104

traffic. Certain innovations being implemented would also attract goods traffic

from roadways. One such innovation is "Piggy Back" system, where railways

carry lorries and trucks with loaded goods on specially designed wagons, which

facilitate rolling on and rolling off the loaded lorries and trucks. Another

innovation for attracting goods traffic from roadways is "Road-Railer", which is

designed to run on road with pneumatic tubes and on rail track with the

conventional steel wheels.

2.6. 6 Leasing of Parcel Space

Leasing of vacant space in luggage van of passenger trains to private

entrepreneurs has been introduced. This scheme will be attractive especially to

entrepreneurs dealing with high value consumer goods or perishables.

2.6.7 Privatisation of Catering Services

A beginning towards privatisation of catering services on Indian Railways

was made in 1992. All new catering units were to be handled by private caterers,

while status quo would be maintained for existing departmental units. Similarly

the zonal railways are advised to contract out the running of cloakrooms and

provision of bedrolls in overnight trains to private entrepreneurs. Management

and maintenance of sanitary services in railway colonies and at railway stations is

another area where private participation is encouraged by Indian Railways.

105

2.6.8 Budget Hotels

As many as hundred 'budget hotels' are proposed to be opened in various

parts of the country to provide inexpensive accommodation for the tourists. This

effort is expected to provide a major boost to the tourism industry in the country

and would go a long way in augmenting the infrastructure available in the country

for tourism.

2.6.9 Procurement from Private Concerns

Indian Railways were repeatedly planning to secure electricity from

independent private power producers, instead of the State Electricity Board. In

Delhi and Kanpur the railways have started getting power from National Thermal

Power Corporation. This would result in considerable savings, because State

Electricity Board charges the railways at rates higher than those of other

industries.

2.6.10 Recent Trend in Passenger Amenities

Indian Railways earned 4153 million passengers during 1996-97 and 4,348

million passengers during 1997-98. So it is keen on providing amenities for the

passengers. During the year 1998-99, Rs. 100 crores was spent for providing

passenger amenities.

106

2.6.11 Customer Care Institute

A Customer Care Institute was set up in Delhi on 15 August 1998 to enable

the frontline railway staff to provide service with smile. The Customer Care

Institute will conduct courses in main contact areas of railway operations such as

reservation, booking of parcels, coach conductors, guards, statiomnasters and

others. Setting up the Institute is intended to make the railways responsive and

user- friendly. This is also designed to bring about attitudinal changes in the

behaviour of the frontline staff towards the railway users.

2.6.12 Passenger Reservation System

For the convenience of the passengers, Indian Railways have computerised

most of the advance reservation centres. This is the world's largest reservation

system. The system handles 3,75,000 applications for reservation every day

through 2500 terminals of 400 centres across the country. In the 1998-99 budget

the norms for setting up a computerised reservation counter was reduced from 300

reservations to 200 reservations per day. New Delhi, Secundrabad, Kolkatta,

Mumbai and Chennai passenger reservation system have been linked under the

system called "Country Network of Computerised Enhanced Reservation and

Ticketing" (CONCERT). With this facility now it is possible to get reservation on

any train from any of the passenger reservation terminals in the country.

/

107

2.6.13 Rail Net

With the establishment of "Rail net" and the computers provided at 150

stations, it will be possible to monitor complaints from passengers at the

divisional, zonal and railway board levels. The staff at the complaint counter

would transmit each complaint to divisional and zonal headquarters through e-mail

for prompt disposal. For expediting the settlement of claims, constant monitoring

is done in zonal level. Rail net is intended to make the railways more and more

user-friendly and responsive to customers. The average time taken in settling

claims by Indian Railways during the year 1997-98 was 33 days.

2.6.14 Interactive Voice Response System (IVRS)

Interactive Voice Response System has been extended to 44 railway

stations 10 and in Southern Railway region this facility is available at Chennai,

Madurai, Trichy, Coimbatore, Bangalore, Trivandrum and Emakulam. This

system facilitates enquiries such as accommodation available in trains, current

status of booking and reservation against cancellation and waitlisted tickets.

2.6.15 Tatkal Scheme

Indian Railways has introduced a unique facility called "Tatkal

Reservation" from 20 December 1997 for the benefit of genuine passengers who

108

could not reserve well in advance. This facility provides passengers with the

facility to confirm accommodation in sleeper class on payment of a nominal

premium of Rs.501- per passenger. Tatkal reservation starts one day in advance at

8.00 A.M. Under this scheme reservation will be available only at the terminal

points and not at in-between stations. This facility is available for more than 100

important trams.

2.6.16 National Train Enquiry System

Passengers are always keen to learn about the actual position of the running

of trains. For this "National Train Enquiry System" is established to provide real

time information regarding running of any train from any location.

2.6.17 Euro Train Pass Scheme

Indian Railways and Euro-Train International have approved a scheme

called "Euro Train International Explorer Pass Scheme". Under this scheme a

standard pass uniformly applicable to all the participating countries would be

introduced. This scheme would entitle the foreign tourists visiting India with this

pass to travel in any train run by Indian Railways. Explorer pass holders would be

entitled to unlimited rail travel during the period of validity of the pass.

2.6.18 Contribution to Improvement in Environment

Railways are alive to environmental issues and in this connection Indian

Railways banned the sale of cigarettes/beedies in the railway platforms and

109

passenger trains from 5 June 1999, the "Environment Day". Indian Railways have

taken this step in the interests of the general health and well-being of the travelling

public. Sale of 'Paans'(a type of tobacco) at railway stations has already been

banned by Indian Railways. Afforestation drive on railway land and railway

stations was started with zeal. This would ensure proper utilisation of available

land and also prevent encroachment on railway lands. Apart from meeting the

needs of wooden sleepers, it will also benefit Indian Railways financially in future.

2.6.19 Passenger Insurance Scheme

Indian Railways introduced Train Passengers Insurance Scheme in August

1994. Under the scheme every railway passenger and platform ticket holder has

been insured against death or injury. Compensation is given in the case of

death/injury on account of commission of a terrorist act, violent attack, robbery,

dacoits, rioting in any train, or in a waiting hail, cloak room, reservation office, on

any platform or any other place within the precincts of railway stations or

accidental falling of any passenger from a running train. Compensation for death

or permanent disability is Rs. 4 Iakhs. In case of injuries the minimum

compensation to be paid is Rs. 32,000 and maximum is Rs.3.60 lakhs depending

upon the gravity of injury. Indian Railways have paid more than 15 crores to

United India Insurance Company Limited, New Delhi to renew its Railway

Passengers Insurance Scheme for the period August 1999 to July 2000.

110

2.7 SUMMARY

The most important form of transport system in India is the Railways,

which is also the India's largest single undertaking with a capital of around

Rs. 21,000 crores. A special feature of the development of railways in India was

that in many regions it went side by side with India's industrial development. The

cotton mill industry 'in Mumbai and the jute textile industry in Kolkotta all these

owe their development to the expansion of railways. From the modest beginning

in 1853, the railway development was rapid and by 1900 there was nearly 25,000

miles of railway line. Railway construction slackened in the next 50 years and

only 10,000 miles of railway line was added and during the Plan period

importance was given to development of railways, and as on 31 March 2000 the

route kilometre being 62795 kms.

Originally Railways were owned and operated by private companies owned

by Englishmen. From 1925 the Government of India took over all the railway

companies. The railways now become a unified Government enterprise. At

present Indian Railways occupies a significant place in the Indian economy.

Indian Railways is the country's biggest nationalised enterprise, and the Indian

railways employs nearly 1.7 million persons. Indian Railways constitutes the

second largest source of non-tax revenue of the Central Government (interest

receipts constitute the most important source of non-tax revenue). It is the largest

III

in Asia and fourth largest in the world. It is also the second largest system in the

world under single management.

Even India has the largest railway system in Asia; it is highly inadequate

and insufficient, as compared to other countries. In Canada the mileage per

1,00,000 of population is 465kms as against only 9.6 kms in India. In Belgium the

route mileage per 100 square miles of area is 44 kms., but in India it is only 2.7

kms.

The National Transport Policy Committee 'in the early 1980's envisaged a

model split in which the Railways are expected to carry 72 per cent of long

distance freight traffic and the roadways are expected to carry 28 per cent of long

distance freight traffic. But the actual trend of share by rail and road has moved in

the opposite direction. The decline in the share of freight traffic by railways, in

spite of being energy-efficient and environment-friendly is not a healthy trend.

This is mainly due to shortage of capacities on railways and very high density on

major routes. It is therefore necessary to give priority to expansion of track and

rolling stock capacity by Railways. The Indian planners should consider this

aspect of the transport problem urgently as this would result in lowering overall

transport costs to the country

112

FOOTNOTES

1. Barry Turner.2000. The Statesman's Year Book.(1998-99). London: MacMillan Reference Limited.

2. Ibid.,p.1181.

3. ThI.,p.3l4.

4. Ibid.,p.605.

5. Ibid ., p..830.

6. A.K.Chakravarthi. 1985. Railways for developing countries. New Delhi:Chetana Publications, p.177.

7. K.P.Bhatnagar. 1987. Transport in Modem India. Kanpur: KishorePublications, p.123.

8. White Paper on Railway Projects. 1998. New Delhi: Ministry of Railways..

9. Status Paper- Indian Railways. 1998. New Delhi: Ministry of Railways. p.11.

10. Salient Features. 1998. Chennai: Southern Railways, p.45.