The Union Railways Ministry has increased the freight charges, which slumped down to 36 percent, with an additional passenger traffic of just 12.9 percent, to bring the Indian Railways back on track.
Freight charges have been increased in an attempt to recover losses incurred by the Indian Railways (IR) due to diversion in the passengers' transportation, stated Railways Minister DV Sadananda Gowda, during the 2014-15 Indian Railways (IR) Budget session.
The freight transportation share of railways was 36 percent, air 1 percent, water 6 percent while road transportation enjoyed maximum amount of the total share with 57 percent, according to a 2011 report by McKinsey & Company.
Of the 37,000 lakh tonne total goods transported in the country, Railways constitutes to only 10,000 lakh tonne, according to news reports.
The condition of railways in terms of passenger traffic is poorer than freight traffic. A report by Planning Commission showed a sharp difference in share of freight and passenger transportation between Railways and Roads.
The data of 2004-05 on the report shows that the road segment gets 87.1 percent share of the total goods transportation, while rail gets only 12.9 percent share.
The IR's share in the passenger traffic started declining after 1960s, while it was after 1999 the road freight traffic took over railways', according to the Planning Commission's report.
However, the McKinsey report suggested measures to help recover the losses that the IR has incurred so far. It focused on the need to increase investment in the infrastructure sector. which can be achieved if India doubles the allocation of resources for the construction of "high-density traffic corridors, connectors and last mile links," according to the report.
Apart from Quadrilateral freight corridors - Delhi-Mumbai, Delhi-Kolkata, Mumbai-Chennai, Mumbai-Kolkata, Delhi-Chennai and Kolkata-Chennai - the report suggest to build Kandla-Kochi corridor as well.
It also suggested building at least 10 critical coal corridors connecting with the mineral rich states - Jharkhand, Orissa, Chhattisgarh. Although, the construction of coal corridors is underway, it is lagging behind the scheduled finishing time of 2017 due to slow implementation.
If the IR does not want to suffer another set of losses due to delay in the completion of this project, then the Gowda ministry needs to speed up the construction process.
His budget that includes the Quadrilateral freight corridors, gauge conversion and surveys of rail line doublings and new tracks, if implemented effectively and worked upon, can help Indian Railways reach a balanced share of 46 percent in transportation by 2020.
But if it fails, it is at the risk of losing 11 percent of its existing share and slump down to 25 percent by 2020, according to McKinsey report.