Indian Railways is the world's fourth largest rail network and second largest rail network under a single management. It is also the world's fourth largest freight carrier. Contributing to the development of India's industrial and economic landscape for over 150 years, it accounts for about 2.3 per cent of GDP and employs about 1.5 million people directly.

Indian Railway consists of an extensive network spread over 109,221 km, encompassing about 6947 stations and 17.7 million passengers.

Performance

The impressive growth and the dramatic turnaround of the Indian Railways has caught the attention of both management experts and global business schools like Harvard and Wharton.

Boosted by the booming economy and trade, Indian railways has been recording impressive growth rates-both on the physical and financial front. For 2007-08, the cash surplus before dividend and net revenue are estimated at US$ 6.17 billion and US$ 4.53 billion, respectively, placing it at a much better position than many of the Fortune 500 companies.

In fact in the last four years, Indian railways has generated a cumulative cash surplus before dividend of US$ 16.94 billion. Also, for the first time in independent Indian history, the return on capital invested in railways is estimated to reach a record 21 per cent.

Simultaneously, the operating ratio of railways has improved from 83.72 per cent in 2005-06 to 78.68 per cent in 2006-07 and further to an estimated 76.3 per cent in 2007-08, making it a member of select club of railways in the world, having an operating ratio of less than 80 per cent.

Freight and Passenger Traffic

The railways have been recording consistent growth rates in the freight and passenger traffic. Freight loadings increased by 9.06 per cent to 794 million tonne (MT) during 2007-08 as against 728 MT in the same period last year. Simultaneously, railways have registered a 13.41 per cent increase in freight earnings to US$ 10.67 billion during April-February 2007-08, compared to US$ 9.41 billion during the corresponding period last year.

Similarly, due to the increase in passenger traffic, earnings from passengers grew by 14.21 per cent to US$ 3.97 billion during April-January 2007-08. With such buoyancy in earnings, the gross traffic earnings of railways for the fiscal year 2007-08 is estimated at US$ 17.9 billion, a 16 per cent growth over the previous year.

Significantly, freight loadings have increased from 557 MT in 2003-04 to 794 MT in 2007-08. In fact, in the last four years Indian railways is likely to achieve an incremental loading of 233 MT, which is about 160 per cent of the incremental loading registered in the entire 1990's decade,