Railways carry 10% more goods in June 2009

In June 2009, the Indian Railways carried 9.6% more cargo at 71.5mn tonnes, compared to June 2008. That is the highest so far in the current fiscal and also much higher than the growth in full year 2008-09. Railway freight volumes give an inkling of how the basic industries are performing in an economy.

Main commodities transported in 2008-09 (by value) are: coal, iron ore, cement, foodgrains, petroleum, fertilisers and other inputs for steel plants. An increase in freight traffic therefore indicates an increase in demand from their user industries, namely power, steel, cement and construction. This corroborates the improvement in industrial production that has been seen in April and May too.

The first quarter is now showing a small increase in rail freight, with volumes increasing by 5% to 213.1mn tonnes. In the second half of 2008-09, freight volume growth had dropped, even declining in some months, pulling down overall growth for the year to 4.9%. Even if the railways manages to keep up volumes at these levels, the base effect itself will ensure healthy growth in the second half. The June 2009 quarter results from the basic industries are likely to show good sales growth, even if profits wilt under the pressure of rising costs.

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