ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Railways After the Spree

Railways: After the Spree ON THE WHOLE, it was not too difficult for the Railway Minister to shirt the responsibility for the sorry state of railway finances as revealed by the Budget presented to Parliament on Monday. Earnings from goods traffic did not come up to expectations in 1966-67, he explained, because the general economic stagnation kept down growth of goods traffic. But the greater part of the Railways' originating tonnage consists of what are termed as low- rated traffic, on a part of which the Railways do not cover even the variable costs of haulage. This is true of coal as the Minister himself stated in his Budget speech. Now, a substantial proportion of the shortfall in goods traffic in 1966-67 in fact consisted of these low-rated items and at least one-third of it of coal. If the freight on coal does not, or did not at the old rates, meet fully the variable costs of moving it, then it would follow that the Railways are in fact better off for not having had to carry the expected volume of traffic. So the link between the financial mess in which the railways find themselves and the shortfall in railway goods traffic may not be as simple as the Railway Minister would have us believe. In fact more important than the volume of goods traffic may be its composition which has been over the years changing to the disadvantage of the Railways with the proportion of low-rated traffic in the total showing a steady rise.

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