Indian Railways has seen “marginal” growth in revenues, with passenger earnings remaining on the lower-side for nearly three years now. Additionally, a high operating ratio — consistently above 98 per cent — remains unaddressed. The Parliamentary Committee, in its report, has pitched for involving private players in operating rail infrastructure for improving efficiency, stepping-up production of rolling stock, including coaches, and working on PPP models for station redevelopment, to ensure effective crowd management and avoid stampede-like situations.
The Committee has also asked the Railways to speed up work on the flagship high-speed bullet train project by finalising the due contract packages.
“They recommend the Ministry… to explore the option of supplementing gross budgetary support with market borrowing by leveraging private sector expertise. This can be achieved by streamlining regulatory processes to develop and operate railway infrastructure, which will help in the advancement, modernisation and faster implementation of railway projects,” the report noted.
“Committee also desire the Ministry to encourage Public-Private Partnerships (PPP) to bring in advanced coach-building technologies,” it further added.
Low Internal Resource Generation
Trends from previous years shows that the Ministry “has not been able to generate enough internal resources”. For 2022-23, the actual internal resource generation was ₹3,400 crore against ₹4,300 crore at RE (2022-23). Further, for 2023-24, the actual internal resource generation was ₹2,943 crore against ₹3,000 crore at RE (2023-24). Similarly, in 2024-25, the actual is ₹767 crore (as of January 31, 2025), which is nearly 75 per cent lower than the RE of ₹3,000 crore.
In the year 2025-26, internal resource generation has been targeted ₹3,000 crore at the BE stage.
“The internal resource generation has shown a downward trajectory since 2022-23,” the Committee noted, adding that lower internal revenue generation means the national transporter would have to rely on greater Budgetary support and also high cost market borrowings to make up for new projects.
Earnings for FY25 were revised downwards to ₹1,341 crore, from ₹2,800 crore. To improve the operating ratio — a measure of profitability that indicates how much Railways spend to earn ₹100 — it has been suggested to enhance “revenue generation and controlling working expenses”.
Efforts should be made to increase freight and passenger traffic revenues through “innovative pricing strategies”, apart from offering better services and improving utilisation of existing assets.
“The Ministry should also focus on… optimising energy consumption, utilising renewable energy for traction, diversifying non fare revenue sources,” said the Standing Committee on Railways, in its third report (Demand for Grants 2025-26).
Freight Operations
With freight accounting for 65 per cent of Railway earnings, the recommendation is to bolster freight operations by “scale(ing) up production of wagons and containers to meet growing logistical”, and push for greater end-to-end connectivity (at ports).
Freight train speeds need to improve beyond the current 25kmph levels by utilising the Dedicated Freight Corridors to avoid route congestion. Flexible pricing options have been recommended, which would involve developing a “freight service model” that offers varied options based on cost, speed and service levels. “This may include high-speed and time-sensitive cargo transport with assured delivery timelines for high-value goods, regular freight operations with competitive pricing for bulk and general cargo, cost-effective and slower transit options for price-sensitive customers etc,” the Committee suggested.
It has also recommended exploring doorstep delivery options, including digital tracking options.
Bullet Train
On the ongoing Mumbai–Ahmedabad bullet train project, the Committee recommended expediting “the finalisation of remaining contract packages and associated works to ensure timely completion”.
The Committee also urged the Ministry to address potential bottlenecks, such as delays in utility shifting and construction challenges, to avoid cost overruns and ensure the project stays on track.
To support the long-term sustainability of high-speed rail operations, the Committee suggested that indigenous manufacturing of Shinkansen technology components under the Make-in-India initiative be expanded.
“For upcoming high sped railway projects, the Committee recommend that feasibility studies be conducted, innovative financing models may be explored, and funding may be secured before sanctioning new corridors,” it said.