ANALYSIS OF 3 YEARS OF PERFORMANCE OF INDIAN RAILWAYS
ANALYSIS OF THREE YEARS PERFORMANCE OF INDIAN RAILWAYS
COURTESY: A Venkateshwar, IRAS, Director/C-TARA/SCR
Indian Railways have exhibited signs of a turnaround in the last three years and the improvement in the performance has been significant , especially in FY05-06. An attempt has therefore been made to analyze
(a) the improvement in FY05-06 over FY04-05 and
(b) the projections made for FY06-07 over FY05-06.
The analysis is based on :
a) 04-05 - actual performance as per accounts.
b) 05-06 - likely performance as per revised estimates .
c) 06-07 - projected performance as per budget estimates .
The analysis is contained in the three annexures enclosed.
Annexure – A : Financials of revenue operations and capital investments.
Annexure - B : Pattern of Goods traffic.
Annexure - C : Pattern of Passenger traffic.
( Source : Railway Budget 2006-07 Documents – Explanatory Memorandum)
ANALYSIS OF Financials Annexure a
I REVENUE OPERATIONS
Total receipts
In 05-06, share of passenger earnings to total receipts dropped from 29% to 27%, while share of freight earnings went up by 2% to 65%.
Recorded a growth of 15% ( 7375 Crs.) in 05-06 over 04-05 , due to a 7% increase in passenger earnings and 11% increase in freight earnings.
Are expected to increase by 10% (5412 crs.) in 06-07., due to a 11 % increase in passenger earnings and 10% increase in freight earnings.
In 06-07, it is expected that ,
Ø Misc. receipts will grow by 8% against 3% in 05-06, due to increase in subsidy.
Ø Passenger earnings will grow by 11% against 7% in 05-06.
Ø Goods earnings will grow only by 10% against 19% in 05-06 during which period there was approximately an 8% increase in the permissible loading per wagon. .
Ø Sundry earnings will fall by 27% against a growth of 56% in 05-06, due to the continued transfer of catering activities to IRCTC..
Ø Traffic Suspense will increase by 50%, against a drop of 70% in 05-06.
Ø Goods earnings will continue to constitute 65% of total receipts.
Total expenditure
v Recorded an increase of 11% ( 5069 Crs) in 05-06 over 04-05.
v Is expected to increase by 10% ( 5120 Crs) in 06-07.
v Ord. Wrkg. Exp. are expected to increase by 9% ( 3116 Crs) in 06-07 (against 5% - 1795 Crs in 05-06) due to a 18% increase in fuel expenditure and 12% increase in repairs & maintenance.
v Increase in Appr. to Pension fund by 12% ( 850 Crs) over 05-06 against a 4% ( 270 Crs) increase in 05-06 over 04-05
v Increase in Appr. to DRF by 20% ( 703 Crs) over 05-06 against a 33% (904 Crs) increase in 05-06 over 04-05. Surplus/Excess
v Likely to increase by 111% in 05-06 over 04-05, due to increase in total receipts.
v Expected to increase by 7% in 06-07
v Reduction in Appr. to Development Fund by 48% ( 893 Crs) in 06-07.
v Capital Fund renewed after 8 years
v Increase in Appr.to Capital Fund by 47%( 1185 Crs) in 06-07
II. Capital Investments
o Reduction in Govt. support by 15% in 05-06 and by 5% in 06-07.
o Government support dropped from 55% (8468 Crs) of total Capex (Capital expenditure ) in 04-05 to 38 % (7185 Crs) in 05-06 and is placed at 29% ( 6800 Crores) of Capex in 06-07.
o Railways’ own funding has increased from 25% of Capex in 04-05 (6888 Crs) to 42% ( 10447 Crs) & 49% ( 12870 Crs) , largely due to increased appr to DRF and Capital fund.
o In both 05-06 & 06-07, borrowings from IRFC funded 18% of the total capital investments.
o Appr to Capital fund increased by 65% ( 1575 Crs) in 06-07.
o Appr to Development Fund drops by 33% ( 397 Crs) in 06-07.
o DRF gets increased appropriation by 40% ( 1221 Crs) in 06-07.
o RVNL funding increased by 13% (57 Crs) in 06-07.
o Capital investments maintain steady growth of 23% - 24% in 05-06 & 06-07.
o Steady increase in share of revenue receipts ploughed back into capital investment – from 31% in 04-05 to 38% in 06-07.
o Capex as a % of revenue expenditure shows a steady increase - 26% from 04-05 to 32% in 06-07.
ANALYSIS OF goods traffic
Annexure b
Performance in 05-06 over 04-05
Ø A 11% ( 66 MT) increase in loading (effect – 3578 Cr.) coupled with a 10% increase in rate/NTKm ( effect- 3287 cr) – due to rationalization of commodity classification (4000 classes reduced to 80 ) helped earnings increase by 19%.(5793 cr.)
Ø However, average lead dropped by 17 kms. (2%) (effect of 913 crs).
Ø Increase in loading was significant in iron ore for exports (10 MT, 26%). , Others (18 MT, 23%) and raw material for steel plants ( RM for SP) ( 9 MT 21%).
Ø Earnings increased significantly in iron ore (1000 Cr.65%), fertilizers ( 540 Cr. 46%) and RM for SP ( 540 Cr. 41%).
Ø The rate/NTKm increased significantly in iron ore (32%) , RM for SP (21%) and foodgrains (20%) which added 616 Cr. 324 cr. & 579 Cr. respectively
Ø A dip in average lead by 2% (17 kms.) lead to a loss of 913 crs. - significant commodities were coal ( 3%, 526 crs.) others ( 5%, 246 crs.).
Ø Cement & fertilizers movements were healthy - increases in loading ( 9%, 18%) and longer leads ( 7%, 11%) helped increase of 21% ( 500 Crs.) & 46% (543 Crs.) in earnings.
Ø A 14% drop in food grain movement ( 12% in loading & 2% in lead) offset by a 20% increase in rate/NTKm. resulted in earnings registering only a 4% in increase),
Performance in 06-07 over 05-06
increase in loading by 9% ( 58 MT - effect - 3204 Cr) with an over all 2% increase in rate /NTKm (effect - 653 Cr.) due to further rationalization of commodity classification (80 classes reduced to 20 ) will together result in a likely increase in earnings by 11% ( 3827 cr)
Since actual movements have not yet taken place average lead has been
assumed to be same ( effect of lead indicated as 24 Crs. in the statement is due to rounding off of derived figures in the analysis and may be ignored.).
ANALYSIS OF passenger traffic Annexure c
Performance in 05-06 over 04-05
A 6% ( 643 million ) increase in number of passengers coupled with a 0.4% increase in average rate per PKm ( due to increase of the average lead in AC I class and AC III tier travel) helped passenger earnings increase by 7% ( 72 Crs).
There was a significant increase in number of passengers traveling by AC 3 Tier (24% , 4 million) and Others (21% , 3 million). AC II tier travel also registered an increase of 18% ( 2 million). The additional revenue on account of the above were Rs.228 Crs. (AC 3Tier) , 76 Crs.(Others) and 178 Crs. (AC 2Tier).
Ordinary II Class/Sleeper travel registered an increase of 9% ( 138 million), which contributed 255 Crs.
Even though, there was no increase in passenger fares, there was a slight increase in the average earnings per PKm from . 24.52 ps. to 24.62 ps.,due to increase in no. of passengers and average lead in AC I Class and AC 3 Tier.
Performance in 06-07 over 05-06.
An increase of 10% (582 million) in no. of passengers and 1% increase in average lead is likely to fetch an additional revenue of 1670 Crs. (11%).
Average leads are expected to increase in AC I Class and Others by 11% & 18% respectively.
A reduction in AC I and AC 2Tier fares will be offset by an increase in avg.lead and no. of passengers as result of which, the earnings in both these classes are expected to register an increase of 11% .
An over all increase of 10% (63 million) in no. of passengers traveling by both Mail Express II and Sleeper Classes, is likely to fetch an additional revenue of 765 Crs. (11%). Similarly, a 10% increase in Ordinary II Class / Sleeper (170 million passengers) will fetch an additional 362 Crs.).
Suburban traffic is also expected to increase by 10% resulting in additional earnings of 158 Crs.
ANALYSIS OF THREE YEARS PERFORMANCE OF INDIAN RAILWAYS
COURTESY: A Venkateshwar, IRAS, Director/C-TARA/SCR
Indian Railways have exhibited signs of a turnaround in the last three years and the improvement in the performance has been significant , especially in FY05-06. An attempt has therefore been made to analyze
(a) the improvement in FY05-06 over FY04-05 and
(b) the projections made for FY06-07 over FY05-06.
The analysis is based on :
a) 04-05 - actual performance as per accounts.
b) 05-06 - likely performance as per revised estimates .
c) 06-07 - projected performance as per budget estimates .
The analysis is contained in the three annexures enclosed.
Annexure – A : Financials of revenue operations and capital investments.
Annexure - B : Pattern of Goods traffic.
Annexure - C : Pattern of Passenger traffic.
( Source : Railway Budget 2006-07 Documents – Explanatory Memorandum)
ANALYSIS OF Financials Annexure a
I REVENUE OPERATIONS
Total receipts
In 05-06, share of passenger earnings to total receipts dropped from 29% to 27%, while share of freight earnings went up by 2% to 65%.
Recorded a growth of 15% ( 7375 Crs.) in 05-06 over 04-05 , due to a 7% increase in passenger earnings and 11% increase in freight earnings.
Are expected to increase by 10% (5412 crs.) in 06-07., due to a 11 % increase in passenger earnings and 10% increase in freight earnings.
In 06-07, it is expected that ,
Ø Misc. receipts will grow by 8% against 3% in 05-06, due to increase in subsidy.
Ø Passenger earnings will grow by 11% against 7% in 05-06.
Ø Goods earnings will grow only by 10% against 19% in 05-06 during which period there was approximately an 8% increase in the permissible loading per wagon. .
Ø Sundry earnings will fall by 27% against a growth of 56% in 05-06, due to the continued transfer of catering activities to IRCTC..
Ø Traffic Suspense will increase by 50%, against a drop of 70% in 05-06.
Ø Goods earnings will continue to constitute 65% of total receipts.
Total expenditure
v Recorded an increase of 11% ( 5069 Crs) in 05-06 over 04-05.
v Is expected to increase by 10% ( 5120 Crs) in 06-07.
v Ord. Wrkg. Exp. are expected to increase by 9% ( 3116 Crs) in 06-07 (against 5% - 1795 Crs in 05-06) due to a 18% increase in fuel expenditure and 12% increase in repairs & maintenance.
v Increase in Appr. to Pension fund by 12% ( 850 Crs) over 05-06 against a 4% ( 270 Crs) increase in 05-06 over 04-05
v Increase in Appr. to DRF by 20% ( 703 Crs) over 05-06 against a 33% (904 Crs) increase in 05-06 over 04-05. Surplus/Excess
v Likely to increase by 111% in 05-06 over 04-05, due to increase in total receipts.
v Expected to increase by 7% in 06-07
v Reduction in Appr. to Development Fund by 48% ( 893 Crs) in 06-07.
v Capital Fund renewed after 8 years
v Increase in Appr.to Capital Fund by 47%( 1185 Crs) in 06-07
II. Capital Investments
o Reduction in Govt. support by 15% in 05-06 and by 5% in 06-07.
o Government support dropped from 55% (8468 Crs) of total Capex (Capital expenditure ) in 04-05 to 38 % (7185 Crs) in 05-06 and is placed at 29% ( 6800 Crores) of Capex in 06-07.
o Railways’ own funding has increased from 25% of Capex in 04-05 (6888 Crs) to 42% ( 10447 Crs) & 49% ( 12870 Crs) , largely due to increased appr to DRF and Capital fund.
o In both 05-06 & 06-07, borrowings from IRFC funded 18% of the total capital investments.
o Appr to Capital fund increased by 65% ( 1575 Crs) in 06-07.
o Appr to Development Fund drops by 33% ( 397 Crs) in 06-07.
o DRF gets increased appropriation by 40% ( 1221 Crs) in 06-07.
o RVNL funding increased by 13% (57 Crs) in 06-07.
o Capital investments maintain steady growth of 23% - 24% in 05-06 & 06-07.
o Steady increase in share of revenue receipts ploughed back into capital investment – from 31% in 04-05 to 38% in 06-07.
o Capex as a % of revenue expenditure shows a steady increase - 26% from 04-05 to 32% in 06-07.
ANALYSIS OF goods traffic
Annexure b
Performance in 05-06 over 04-05
Ø A 11% ( 66 MT) increase in loading (effect – 3578 Cr.) coupled with a 10% increase in rate/NTKm ( effect- 3287 cr) – due to rationalization of commodity classification (4000 classes reduced to 80 ) helped earnings increase by 19%.(5793 cr.)
Ø However, average lead dropped by 17 kms. (2%) (effect of 913 crs).
Ø Increase in loading was significant in iron ore for exports (10 MT, 26%). , Others (18 MT, 23%) and raw material for steel plants ( RM for SP) ( 9 MT 21%).
Ø Earnings increased significantly in iron ore (1000 Cr.65%), fertilizers ( 540 Cr. 46%) and RM for SP ( 540 Cr. 41%).
Ø The rate/NTKm increased significantly in iron ore (32%) , RM for SP (21%) and foodgrains (20%) which added 616 Cr. 324 cr. & 579 Cr. respectively
Ø A dip in average lead by 2% (17 kms.) lead to a loss of 913 crs. - significant commodities were coal ( 3%, 526 crs.) others ( 5%, 246 crs.).
Ø Cement & fertilizers movements were healthy - increases in loading ( 9%, 18%) and longer leads ( 7%, 11%) helped increase of 21% ( 500 Crs.) & 46% (543 Crs.) in earnings.
Ø A 14% drop in food grain movement ( 12% in loading & 2% in lead) offset by a 20% increase in rate/NTKm. resulted in earnings registering only a 4% in increase),
Performance in 06-07 over 05-06
increase in loading by 9% ( 58 MT - effect - 3204 Cr) with an over all 2% increase in rate /NTKm (effect - 653 Cr.) due to further rationalization of commodity classification (80 classes reduced to 20 ) will together result in a likely increase in earnings by 11% ( 3827 cr)
Since actual movements have not yet taken place average lead has been
assumed to be same ( effect of lead indicated as 24 Crs. in the statement is due to rounding off of derived figures in the analysis and may be ignored.).
ANALYSIS OF passenger traffic Annexure c
Performance in 05-06 over 04-05
A 6% ( 643 million ) increase in number of passengers coupled with a 0.4% increase in average rate per PKm ( due to increase of the average lead in AC I class and AC III tier travel) helped passenger earnings increase by 7% ( 72 Crs).
There was a significant increase in number of passengers traveling by AC 3 Tier (24% , 4 million) and Others (21% , 3 million). AC II tier travel also registered an increase of 18% ( 2 million). The additional revenue on account of the above were Rs.228 Crs. (AC 3Tier) , 76 Crs.(Others) and 178 Crs. (AC 2Tier).
Ordinary II Class/Sleeper travel registered an increase of 9% ( 138 million), which contributed 255 Crs.
Even though, there was no increase in passenger fares, there was a slight increase in the average earnings per PKm from . 24.52 ps. to 24.62 ps.,due to increase in no. of passengers and average lead in AC I Class and AC 3 Tier.
Performance in 06-07 over 05-06.
An increase of 10% (582 million) in no. of passengers and 1% increase in average lead is likely to fetch an additional revenue of 1670 Crs. (11%).
Average leads are expected to increase in AC I Class and Others by 11% & 18% respectively.
A reduction in AC I and AC 2Tier fares will be offset by an increase in avg.lead and no. of passengers as result of which, the earnings in both these classes are expected to register an increase of 11% .
An over all increase of 10% (63 million) in no. of passengers traveling by both Mail Express II and Sleeper Classes, is likely to fetch an additional revenue of 765 Crs. (11%). Similarly, a 10% increase in Ordinary II Class / Sleeper (170 million passengers) will fetch an additional 362 Crs.).
Suburban traffic is also expected to increase by 10% resulting in additional earnings of 158 Crs.
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