Presenting the annual rail budget for 2016/17, Railway Minister Suresh Prabhu said the planned budget outlay for the world’s fourth-largest network would be 1.21 trillion rupees ($17.6 billion), up about 20 percent from the current year’s estimated expenditure.

But a slowdown in growth of passenger and freight revenues has put pressure on the railways’ finances one year after Prime Minister Narendra Modi’s government unveiled a 5-year $137 billion investment plan to overhaul the saturated and decrepit network.

“These are challenging times…We are faced with two headwinds, entirely beyond our control; tepid growth of our economy’s core sectors due to an international slowdown and the looming impact of the 7th pay commission,” Prabhu told India’s parliament four days ahead of the federal budget.

Prabhu said the railway would need to cut costs, grow its freight business which provides two-thirds of its revenue and target new sources of non-tariff revenue through measures such as redeveloping train stations.

“We need to look beyond the current approach to expand the basket (of freight commodities). We will make sure we recapture the traffic,” he told India’s parliament, announcing plans for three new dedicated freight corridors across the country.

(Reporting by Tommy Wilkes and Manoj Kumar; Editing by Malini Menon and Kim Coghill)

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NEW DELHI (Reuters) – India’s state-owned railways is reviewing the tariff structure for its freight business and wants to expand the basket of commodities it transports to boost revenues, Railway Minister Suresh Prabhu said on Thursday.

Presenting the annual rail budget for 2016/17, Prabhu said the freight business – which provides two-thirds of Indian railways’ revenues – was struggling as capacity constraints bite and industrial demand slows.

“These are challenging times, maybe the toughest,” he told parliament, announcing plans for three new dedicated freight corridors across the country. “We need to look beyond the current approach to expand the basket (of commodities). We will make sure we recapture the traffic.”

(Reporting by Tommy Wilkes; Editing by Malini Menon)

The post Indian railways to target freight business revival – Suresh Prabhu appeared first on Ubiq TV | English News Channel.