India’s growth story is intricately linked to the development of its infrastructure, with transportation playing a pivotal role in driving economic progress. As the world’s fastest-growing major economy, India is poised to see its GDP soar, and a robust, efficient transportation network is essential to sustaining this momentum. As the backbone of India’s transportation system, Indian Railways plays a vital role in connecting the country, facilitating trade, and driving economic growth. However, in an era of rapidly changing market dynamics, railways need to diversify their revenue streams beyond traditional fare and freight incomes.
The Government of India, through the National Rail Plan (NRP) for 2030, envisions a future-ready railway system that will significantly enhance operational capacity, sustainability, and efficiency. This plan aims to increase the modal share of railways in freight to 45% by 2030, ensuring that the rail network is prepared for future demand up to 2050.
Financial Performance of Indian Railways: Current Figures
Indian Railways continues to be a vital component of India’s transportation infrastructure, demonstrating growth in both passenger and freight sectors. In the fiscal year 2024-25, internal revenues are estimated at ₹2,78,500 crore, marking an 8% increase over the previous year’s revised estimates. Traffic revenue contributes ₹2,78,100 crore, with 65% from freight services (₹1,80,000 crore) and 29% from passenger services (₹80,000 crore). The remaining 6% of the total traffic revenue (which amounts to ₹16,400 crore) can be attributed to various other revenue sources for Indian Railways. These include station and catering services, advertising rights, and other incidental services.
Looking ahead, Indian Railways projects revenues exceeding ₹3 lakh crore in the fiscal year 2025-26, an approximate 8% rise from 2024-25. Passenger revenue is expected to grow by 16% to ₹92,800 crore, while freight revenue anticipates a 4.4% increase to ₹1,88,000 crore.
From April to December 2024, Indian Railways generated ₹1,93,000 crore in revenue, a 4% year-on-year growth. This includes ₹1,26,000 crore from freight and ₹55,988 crore from passenger services. Capital expenditure for the same period was ₹1,92,000 crore, reflecting a 2% increase over the previous year.
Government’s Vision for the Future of Indian Railways
With a clear focus on enhancing operational capacities and leveraging commercial policy initiatives, the plan aims to drive growth, improve service delivery, and increase the role of railways in India’s economic development.
Key Government Vision Points:
- The government aims to increase railways’ freight share to 45% by 2030 through strategic operational improvements and commercial policies.
- A target to increase freight train speeds to 60-70 km/h to significantly reduce transit times and enhance logistics efficiency.
- 100% electrification of the railway network, supporting sustainability and green energy initiatives to reduce carbon footprints.
- Identifying new dedicated freight and high-speed rail corridors to meet the rising demand for fast and efficient transportation.
- Addressing the rolling stock and locomotive requirements for both freight and passenger services, ensuring readiness for future demand.
- Encourages private sector involvement in operations, infrastructure development, and rolling stock management to drive efficiency, investment, and innovation.
- Capital investment plan to support these goals, ensuring funding is allocated for long-term infrastructure development and modernisation projects.
Government’s Vision vs Current Growth in Indian Railways (as of April 2025)
| Vision Area | Government Target | Current Progress (as of April 2025) |
| Freight Modal Share | Increase to 45% by 2030 | Currently at 27% |
| Freight Train Speed | Increase to 60–70 km/h | Average speed increased from 22 km/h to 50 km/h |
| Electrification | 100% of broad-gauge network | 97% electrified |
| Dedicated Freight Corridors (DFCs) | Complete Eastern and Western DFCs; plan new corridors | Eastern DFC fully operational; ~80% of Western DFC commissioned; plans for additional corridors underway |
| Rolling Stock Modernization | Expand and upgrade fleet | 500 WAG-12B locomotives in service; 1,200 WAG-00 locomotives ordered from Siemens |
| Private Sector Participation | Encourage in operations and infrastructure | Initiatives include Gati Shakti Cargo Terminals and policies for private investment in rolling stock |
| Capital Investment | ₹2.65 trillion allocated for FY 2024–25 | ₹1.92 trillion spent by January 2025, focusing on safety and rolling stock |
Roadblocks to Indian Railways’ Vision 2030
While the government’s vision for Indian Railways is promising, some challenges could impact its ability to fully meet future demands. The goal of capturing 45% of the freight market by 2030 is ambitious, but as global trade and logistics needs evolve, more than just operational improvements will be required.
(figure in hectares)
| Zonal Railway | Total railway Land | Total railway land leased/licensed |
| Central | 31,476 | 168 |
| Eastern | 21,082 | 469 |
| East Central | 33,644 | 2,437 |
| East Coast | 23,010 | 273 |
| Northern | 46,447 | 474 |
| North Central | 21,149 | 220 |
| North Eastern | 25,899 | 326 |
| Northeast Frontier | 48,469 | 1,214 |
| North Western | 27,555 | 87 |
| Southern | 26,953 | 365 |
| South Central | 40,600 | 237 |
| South Eastern | 34,877 | 970 |
| South East Central | 23,085 | 368 |
| South Western | 19,893 | 197 |
| Western | 38,275 | 620 |
| West Central | 23,656 | 183 |
| Metro | 152 | 0.42 |
| Production Units | 3,989 | 204 |
| Total | 490,211 | 8,812.42 |
Indian Railways holds a substantial land portfolio totaling 490,211 hectares across the country. Of this, only 8,812.42 hectares, accounting for merely 1.80%, have been leased or licensed for various purposes. This significant disparity indicates a considerable scope for enhanced land utilization. Effectively managing this extensive land portfolio presents significant challenges, including addressing encroachments, streamlining land acquisition processes, and developing strategic plans for optimal land use to support future railway expansions and modernization efforts.
Lastly, while the capital investment plan is a critical part of the vision, an agile approach to funding will be essential to accommodate technological advances and global shifts. Therefore, Indian Railways must adopt a flexible strategy that integrates cutting-edge technology and adaptive investment models to address the dynamic needs of the future.
Non-Fare Revenue Generation in Indian Railways: A Missed Opportunity
Indian Railways, despite being one of the most used transportation networks in the world, faces challenges in maximising its non-fare revenue (NFR). Non-fare revenues include income generated from commercial activities such as land leasing, property sales, advertisements, and railway hospitals. As of now, NFR accounts for only about 3-5% of the total earnings of Indian Railways, far below the potential seen in other global railway systems. This is primarily due to the limited scope of current initiatives and the underutilisation of valuable assets owned by the Railways.
● Property Sales and One-Time Revenue
One of the key sources of non-fare revenue for Indian Railways is the sale and leasing of railway land and properties. The Railways own a vast amount of land across the country, but its revenue from these assets often comes in the form of one-time sales, rather than recurring income. This transactional model has led to missed opportunities for long-term financial growth. For instance, Indian Railways has sold land and properties in metro cities to generate revenue, but the resulting income from these sales is temporary.
● Current Condition of Railway Hospitals
Another area where Indian Railways could potentially enhance its non-fare revenue is its network of railway hospitals. These hospitals were initially set up to cater to the medical needs of railway employees and their families. However, with over 120 railway hospitals across India, the current state of these facilities leaves much to be desired. Additionally, while railway hospitals do generate some revenue from healthcare services provided to non-employees, the financial sustainability of these hospitals remains a concern. In recent years, there have been calls to modernise these hospitals and make them commercially viable by offering services to the general public at competitive rates, yet challenges like infrastructure constraints, resistance to privatisation, and the need for substantial investments have made progress slow.
● Underutilised Barren Lands
Despite owning a significant amount of barren and underutilised land across the country, Indian Railways faces several challenges in effectively leveraging these valuable assets. One of the primary issues is the slow pace of land development due to bureaucratic hurdles, land acquisition complexities, and the lengthy clearance processes, which often hinder timely and efficient utilisation of these lands. Additionally, the lack of proper land management strategies and the inadequate infrastructure for large-scale projects limits the potential for development.
New Era of Revenue: A Strategic Approach to Transforming Assets into Income
Indian Railways has a tremendous opportunity to boost its non-fare revenue by rethinking its approach to property commercialisation and the management of its railway hospitals. Both areas have significant untapped potential that could provide sustainable, long-term revenue streams for the Railways.
A. Optimising Property Utilisation for Recurring Revenue
Indian Railways could shift from generating one-time revenue through land sales to a more sustainable model focused on long-term, recurring income. By choosing to lease out its vast land holdings to private developers, the Railways can enable the creation of commercial properties such as office complexes, malls, or mixed-use developments. This approach ensures a steady stream of rental income, with the added advantage of compound revenue growth over time.
B. Smart Infrastructure for Sustainable Growth
The adoption of advanced technologies such as Artificial Intelligence (AI) and smart building systems in the planning, design, and construction of railway-owned infrastructure can significantly enhance operational efficiency and environmental sustainability. These innovations improve energy performance and increase the appeal to high-value tenants, thereby boosting the commercial potential of the assets. Furthermore, this approach aligns with the broader goals of sustainable urban development and modernisation.
C. Revitalising Railway Hospitals for Financial Sustainability
The existing model for railway hospitals, which primarily focuses on providing subsidised healthcare to railway employees, has its limitations. To enhance financial sustainability, these hospitals can be modernised and expanded to serve a broader segment of the population. By partnering with leading healthcare operators or private hospital chains with expertise in managing large-scale healthcare facilities, Indian Railways can transform its hospitals into high-quality, commercially viable healthcare providers.
These partnerships could involve revenue-sharing models, where private operators manage hospital operations while contributing a percentage of the revenue to Indian Railways. This would not only enhance the quality of healthcare services for employees but also enable the hospitals to generate substantial revenue from external patients. Additionally, upgrading the infrastructure with state-of-the-art medical equipment and technology would increase patient trust and demand, further boosting the revenue potential.
D. Advancing the Training of Railway Doctors for a Healthier Future on Tracks
The healthcare services provided by Indian Railways are essential to ensuring the well-being of its employees and other patients. To enhance these services, a comprehensive training program should integrate advancements in medical technology, emergency care, and specialised fields such as telemedicine and mental health, which are becoming increasingly important in the fast-paced, high-stress railway environment.
Collaborations with top medical institutions, alongside the use of simulated training environments and case-based learning, will ensure that railway medical staff are well-equipped to handle the unique challenges of their roles. Furthermore, the adoption of digital health tools, AI-assisted diagnostics, and teleconsultation platforms will improve both the accessibility and quality of healthcare services across the vast railway network.
E. Introducing Advanced Technologies for Enhancing Railway Healthcare Systems
As Indian Railways continues its modernisation journey, implementing cutting-edge technologies such as telemedicine, AI-driven diagnostics, and electronic health records (EHR) can transform healthcare delivery within railway hospitals and clinics. Telemedicine can bridge gaps in remote areas, enabling patients to consult specialists without the need for extensive travel. AI-powered diagnostic tools can aid healthcare professionals in providing accurate and timely treatment, reducing human error and improving operational efficiency.
Additionally, high-tech ambulances, equipped with advanced medical equipment like ventilators, ECG monitors, life-saving defibrillators, and telemedicine capabilities, can offer critical care during transit. These ambulances, functioning as mobile intensive care units (ICUs), allow medical teams to stabilise patients in real-time while en route to the nearest railway hospital. With real-time telemedicine connectivity, the onboard medical staff can consult with specialists, ensuring timely and accurate decision-making, regardless of the ambulance’s location.
F. Repurposing Underutilised Railway-Owned Barren Land
Indian Railways owns a significant amount of barren and underutilised land across the country, which remains largely dormant despite its vast potential. One major opportunity lies in using this land for renewable energy projects, particularly solar farms. Given India’s ambitious renewable energy targets, setting up solar energy infrastructure on railway-owned land can provide a steady power supply, reduce the railway’s carbon footprint, and contribute to the national grid. This initiative would also align with India’s vision for a greener, more sustainable future.
Additionally, Indian Railways can repurpose these lands for green housing, urban development projects, or educational institutions. With the growing demand for urban expansion, developing affordable housing or educational complexes can address societal needs while generating new revenue streams. These developments could be integrated with transportation hubs, enhancing connectivity and fostering economic growth in surrounding areas.
Another valuable option is the establishment of logistics and warehousing facilities. Strategically located railway land can be transformed into key commercial hubs for e-commerce, reducing transportation costs and improving supply chain efficiency. These projects can attract private investment, contributing significantly to the growth of the national economy.
G. Corporate Tie-ups and Sponsorships
Corporate tie-ups and sponsorships present a lucrative opportunity for Indian Railways to generate additional revenue while simultaneously enhancing its brand visibility. Indian Railways can offer corporate entities the chance to sponsor specific trains or stations, providing companies with prominent branding opportunities on trains, station billboards, and digital platforms.
Furthermore, companies could have entire train services branded with their logos, products, or themes, creating a unique and highly visible advertising platform. These branded trains can be aligned with specific campaigns or events, making them a central element of a broader marketing strategy. Sponsorships can be both long-term and short-term, offering flexibility. For example, a tech company could sponsor a “smart train” equipped with Wi-Fi and high-tech services, using the opportunity to showcase its products or services in a highly engaging manner.
H. Noteworthy Mentions
In addition to the core strategies for increasing income, Indian Railways can consider several other innovative approaches to enhance its financial performance and support long-term sustainability. These honorary mentions highlight opportunities that may not immediately result in direct revenue but can significantly contribute to brand value, passenger satisfaction, and operational efficiency:
- Commercial Utilization of Infrastructure & Real Estate
| Initiative | Description |
| Railway Stations as Advertising Hotspots | Leverage high footfall areas like platforms, trains, and digital screens for targeted brand advertisements. |
| Railway Stations as Commercial Hubs | Modernize stations with retail, offices, food courts, and entertainment zones—similar to airports. |
| Land Leasing for Hotels, Startups & MSMEs | Lease land near stations for hospitality and entrepreneurial ventures, generating consistent rental income. |
| Co-working Spaces in Urban Rail Zones | Convert unused rail buildings into workspaces, boosting urban productivity and rentals. |
| PPP Model for Infrastructure Development | Collaborate with private players to co-develop stations, terminals, and warehouses without fiscal stress. |
- Premium Travel Experiences & Passenger Services
| Initiative | Description |
| Co-Branded Luxury Travel | Partner with hotels and agencies to offer high-end train journeys with gourmet meals and premium concierge services. |
| Onboard Product Placement & Retail | Introduce retail outlets onboard selling exclusive travel essentials, gadgets, and branded merchandise. |
| Catering via Private Players | Allow private catering brands to manage onboard kitchens for better food quality and hygiene. |
- Digital Innovation & Connectivity
| Initiative | Description |
| Digital Partnerships for Wi-Fi & OTT | Collaborate with telecom and OTT platforms for Wi-Fi access and entertainment onboard and at stations. |
| Loyalty Programs & Strategic Tie-ups | Partner with airlines, banks, and hotels to reward frequent travelers through shared loyalty ecosystems. |
- Sustainability & CSR Collaborations
| Initiative | Description |
| Solar Farms & Wind Energy | Use surplus land for renewable energy projects, reducing carbon footprint and energy costs. |
| Eco Parks & Heritage Trails | Repurpose scenic routes or idle land into tourist parks and railway museums. |
| CSR-Based Sustainability Projects | Invite CSR funds for green initiatives like waste management, solarization, and water conservation. |
- Logistics & Freight Development
| Initiative | Description |
| Development of Logistics Parks | Use railway land for integrated logistics hubs under Gati Shakti & NLP. |
| Invests in Dedicated Freight Corridors | Attract private logistics firms to develop efficient cargo movement infrastructure. |
| Inland Container Depots (ICDs) | Build dry ports near industrial belts to facilitate exports and multimodal cargo connectivity. |
| Cold Storage & Polyhouses | Set up integrated agri-logistics facilities to preserve and transport perishable goods efficiently. |
-
Urban & Rural Development Projects
| Initiative | Description |
| Affordable Housing | Develop housing for low-income groups using unused railway land near cities. |
| Smart City Integration | Use land within urban rail zones for smart city projects with integrated transport and digital infra. |
| Agro Processing & Organic Farming | Enable rural land to support organic produce and agro hubs with rail-linked supply chains. |
-
Education & Skill Building
| Initiative | Description |
Skill Development Centres |
Partner with NSDC and industry to train youth in rail trades, logistics, and infrastructure-related skills. |
Final Analysis
In summary, Indian Railways is well-positioned to evolve into a financially resilient and future-ready transport network by leveraging its extensive assets for strategic non-fare revenue generation. Moving away from short-term gains such as one-time land sales and adopting long-term models like property leasing will help establish steady, recurring income without eroding asset value.
This shift can play a vital role in offsetting fixed expenditures, easing the current overreliance on freight revenues for operational funding. In doing so, the Railways will be better equipped to allocate freight income towards infrastructure development, capacity expansion, and innovation-focused initiatives. The decoupling of operational budgets from market volatility further strengthens financial stability and long-term planning capacity.
Beyond internal gains, the broader economic impact of these reforms is significant. Strategic asset use can stimulate urban growth, generate new employment opportunities, and contribute to sustainable development. Ultimately, these measures will support the national agenda of infrastructure modernisation while ensuring that Indian Railways continues to play a central role in driving economic progress with financial independence and resilience.
Reference:
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2116610&utm_source
(https://prsindia.org/files/budget/budget_parliament/2024/DFG_2024-25_Analysis_Railways.pdf)
0 Comments