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Railway Freight volume is likely to grow by 2.1 per cent in the next fiscal as compared to its one per cent growth in 2015-16 according to a study.

The National Council of Applied Economic Research (NCAER) study on factors impacting railway freight traffic in India presented to Railway Minister Suresh Prabhu said the doubling of the growth rate is possible without any major policy shifts.

Railways had asked the economic think-tank NCAER for the study ahead of the Railway budget 2016-17 to focus on Railway’s freight business and to identify the reasons for the recent plateauing of its growth to around one per cent per annum for bulk freight commodities including coal iron ore cement steel fertilisers and foodgrains and container traffic.

The NCAER study also estimates the likely volume demand in 2016-17 for railway freight. Freight accounts for nearly two-thirds of railway’s revenue spread over two broad categories bulk and other goods according to a release.

Railway’s freight business is estimated to have grown at about one per cent in 2015-16. The NCAER study finds that there are several reasons for the nearly flat growth in IR’s freight business in 2015-16. The Indian economy has been passing through a difficult and challenging time since 2014-15.

Deficient rainfall and two drought years in a row have lowered rural demand. Industry too remains sluggish due to low investment demand.

Alongside industry growth in gross value added in 2015-16 for the mining and quarrying sector railway’s largest client is estimated to be 6.9 per cent as compared to 10.8 per cent in 2014-15.Crucial components of core infrastructure coal steel cement and electricity also showed a decline in their growth rate for April-December 2015 as compared to their performance in 2014-15.

Railways freight charges have gone up by 67 per cent in the last five years while there has been a decline in fuel prices. Road transport for freight has now become much cheaper than rail.

Among the policy reforms suggested by the NCAER study are correcting the fare/freight ratio; providing for periodic reviews of surcharges like the port congestion surcharge and busy season surcharge; steps to encourage short lead traffic; a review of the dual pricing for iron ore and review of transportation product design to cater to market requirements of smaller parcel sizes.

The country’s railway freight traffic growth is all set to double next year says Delhi based think-tank National Council of Applied Economic Research (NCAER).

In a study carried out for the railway ministry NCAER states that the growth will happen on a business-as-usual situation without any major policy shifts.

“Indian Railways’ freight volume is likely to grow by 2.1 per cent in 2016/17 as compared to 1 per cent growth in 2015/16” it states. Freight accounts for nearly two-thirds of Railways’ revenue spread over two broad categories: bulk and other goods.

The study notes a number of commercial operational and policy-related issues that could have an impact on IR’s freight traffic.

“The NCAER study shows that there is tremendous untapped potential for improving IR’s freight business if it can begin to meet the growing competition from the road sector. The railways need to compete on price punctuality and predictability the keys to a successful logistics business” said Shekhar Shah Director-General of NCAER.

Railway’s freight charges have gone up by 67 per cent in the past five years while there has been a decline in fuel prices. Road transport for freight has now become much cheaper than rail.

Among the policy reforms suggested by the NCAER study are correcting the fare/freight ratio; providing for periodic reviews of surcharges like the port congestion surcharge and busy season surcharge; steps to encourage short lead traffic; a review of the dual pricing for iron ore; review of transportation product design to cater to market requirements of smaller parcel sizes; and liberalisation of two-point and three-point loading rules

The short-term study did not go into tariff issues but a longer study is planned in the future to look at tariff price sensitivity and cross-subsidisation issues.

The NCAER study finds that there are several reasons for the nearly flat growth in IR’s freight business in 2015/16. The Indian economy has been passing through a difficult and challenging time since 2014/15.

Deficient rainfall and two drought years in a row have lowered rural demand. Industry too remains sluggish due to low investment demand. Services which have been a key driver for growth have also not remained immune to the slowdown.

Alongside industry growth in gross value added in 2015/16 for the mining and quarrying sector railway’s largest client is estimated to be 6.9 per cent as compared to 10.8 per cent in 2014/15. Crucial components of core infrastructure coal steel cement and electricity also showed a decline in their growth rate for April-December 2015 as compared to their performance in 2014/15.

The Railway Board requested NCAER for this short-term study to focus on Indian Railway’s freight business and to identify the reasons for the recent plateauing of its growth to around 1 per cent per annum for bulk freight commodities including coal iron ore cement steel fertilisers and food grains and container traffic.

While sentiments regarding production domestic sales exports imports of raw materials pre-tax profits and costs either have remained the same or have shown marginal improvement during the quarter.

The business sentiment in the country remained largely unchanged growing by just 0.6% during the quarter ended December a survey by economic thinktank NCAER has found.

“NCAER’s Business Confidence Index (BCI) remained relatively unchanged in the third quarter of 2015 16. The 95th round of the Business Expectations Survey (BES) shows that the BCI increased by 0.6% suggesting business sentiments have remained largely unchanged since the last quarter” the survey said.

However the BCI continues to fall on a year-on-year basis (12.2%) it said.

The National Council of Applied Economic Research (NCAER) said the services sector has the highest BCI followed by consumer durables consumer non-durables intermediate goods and capital goods. The BCI of consumer durables sector increased the most (8.3%) while the BCI of the intermediate goods sector declined the most (6.4%) it said.

NCAER survey said there was improvement in the BCI in all expect the private limited companies with public sector firms BCI rising the highest (21.6%). The BCI of the private limited companies has fallen by 4.8% it added.

While sentiments regarding production domestic sales exports imports of raw materials pre-tax profits and costs either have remained the same or have shown marginal improvement during the quarter.

“Significant exception is the consumer nondurables sectors which shows decline in sentiments with regard to production sales exports and profit.” Overall expectations about costs of raw materials labour and electricity remain muted it said adding labour markets show some optimism with expectations regarding employment and wages showing improvement.

Also the survey showed political sentiment remained more or less stable with the Political Confidence Index (PCI) showing a quarter-on-quarter fall of 0.8%.

The business sentiment in the country remained largely unchanged growing by just 0.6 per cent during the quarter ended December a survey by economic thinktank NCAER has found.

“NCAER’s Business Confidence Index (BCI) remained relatively unchanged in the third quarter of 2015-16.

“The 95th round of the Business Expectations Survey (BES) shows that the BCI increased by 0.6 per cent suggesting business sentiments have remained largely unchanged since the last quarter” the survey said.

However the BCI continues to fall on a year-on-year basis (12.2 per cent) it said.

The National Council of Applied Economic Research (NCAER) said the services sector has the highest BCI followed by consumer durables consumer non-durables intermediate goods and capital goods.

The BCI of consumer durables sector increased the most (8.3 per cent) while the BCI of the intermediate goods sector declined the most (6.4 per cent) it said.

The survey said there was improvement in the BCI in all expect the private limited companies with public sector firms BCI rising the highest (21.6 per cent).

&n of the private limited companies has fallen by 4.8 per cent it added.

While sentiments regarding production domestic sales exports imports of raw materials pre-tax profits and costs either have remained the same or have shown marginal improvement during the quarter.

“Significant exception is the consumer nondurables sectors which shows decline in sentiments with regard to production sales exports and profit.”

Overall expectations about costs of raw materials labour and electricity remain muted it said adding labour markets show some optimism with expectations regarding employment and wages showing improvement.

Also the survey showed political sentiment remained more or less stable with the Political Confidence Index (PCI) showing a quarter-on-quarter fall of 0.8 per cent.

NEW DELHI: The business sentiment in the country remained largely unchanged growing by just 0.6 per cent during the quarter ended December a survey by economic thinktank NCAER has found.

“NCAER’s Business Confidence Index (BCI) remained relatively unchanged in the third quarter of 2015­16.

“The 95th round of the Business Expectations Survey (BES) shows that the BCI increased by 0.6 per cent suggesting business sentiments have remained largely unchanged since the last quarter” the survey said.

However the BCI continues to fall on a year­on­year basis (12.2 per cent) it said.

The National Council of Applied Economic Research (NCAER) said the services sector has the highest BCI followed by consumer durables consumer non­durables intermediate goods and capital goods.

The BCI of consumer durables sector increased the most (8.3 per cent) while the BCI of the intermediate goods sector declined the most (6.4 per cent) it said.

NCAER survey said there was improvement in the BCI in all expect the private limited companies with public sector firms BCI rising the highest (21.6 per cent).

The BCI of the private limited companies has fallen by 4.8 per cent it added.

While sentiments regarding production domestic sales exports imports of raw materials pre­tax profits and costs either have remained the same or have shown marginal improvement during the quarter.

“Significant exception is the consumer nondurables sectors which shows decline in sentiments with regard to production sales exports and profit.”

Overall expectations about costs of raw materials labour and electricity remain muted it said adding labour markets show some optimism with expectations regarding employment and wages showing improvement.

Also the survey showed political sentiment remained more or less stable with the Political Confidence Index (PCI) showing a quarter onquarter fall of 0.8 per cent.