Explained: How Does The Indian Railway Earn Money?

?2.40 lakh crore. That¡¯s how much revenue the Indian Railways had earned in the previous financial year 2022-23, that ended on March 31st 2023. This has been the railways' highest ever revenue, being nearly ?49,000 crore more from the previous year¡¯s figure, according to a ministry statement released earlier this year.

But have you ever wondered how does the Indian Railways earn money? What are its revenue sources? Read on to find out.

Revenue Sources For Indian Railways

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The earnings of Indian railways are classified under three sub major heads:

1. Earnings from Coaching traffic-This includes ticket fares, reservation charges, surcharges (if any), service charges (if any), luggage charges, and other sundry charges.

2. Earnings from goods traffic-Fuel, general merchandise, gross earnings from road services. and miscellaneous goods earnings.

3. Sundry other earnings- Electric telegraph earnings,rents and tolls from retiring rooms, rest houses etc, land leasing, bridge tolls, receipts from catering department, sale proceeds from unclaimed/damaged goods, dividends etc. from investments in road transport service, guarantee fees received from public sector undertakings, and miscellaneous earnings.

Also Read; Jaya Verma Sinha Becomes First Woman To Be Appointed Railway Board

Inside Indian Railways' ?2.40 Lakh Crore Revenue This Year

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If we look into the details of Indian Railways' ?2.4 lakh crore revenue that it earned in the financial year 2022-23, the freight revenue rose to ?1.62 lakh crore, a growth of nearly 15 per cent from the previous year.

Indian Railways' passenger revenue has registered an all-time high growth of 61 per cent to reach ?63,300 crore, as per PTI report.

"After three years, Indian Railways is able to fully meet the pension expenditures. Buoyancy in revenues and tight expenditure management have helped in achieving an operating ratio of 98.14 per cent, well within the RE target. After meeting all revenue expenditure, railways generated ? 3,200 crore for capital investment from its internal resources," the ministry's statement mentioned.

The statement further stated that in terms of traffic revenue, the railways earned ?63,300 crore in 2022-23 as compared to ?39,214 crore in 2021-22. The railways earned ?5,951 crore as other coaching revenue in 2022-23 as compared to ?4,899 crore during 2021-22. Sundries revenue stood at ?8,440 crore during FY 2022-23 as compared to ?6,067 crore in 2021-22.

During 2022-23, the gross revenue stood at ?2,39,803 crore as compared to ?1,91,278 crore in 2021-22. Also, gross traffic receipts stood at ?2,39,750 crore as compared to ?1,91,206 crore in 2021-22. The total railway receipts in 2022-23 was ?2,39,892 crore as compared to ? 1,91,367 crore the previous year.

According to the statement, the total railway expenditure in 2022-23 was ?2,37,375 crore as compared to ?2,06,391 crore in 2021-22. The operating ratio in 2022-23 was 98.14 per cent.

In terms of capital expenditure, the capital invested was ?1,09,004 crore during 2022-23 as compared to ?81,664 crore in 2021-22. Under the railway safety fund, ?30,001 crore was spent during 2022-23 as compared to ?11,105 crore during 2021-22.

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