Indian Railways is likely to miss its revenue target for the current financial year (FY26) as shortfalls in two major income streams — coal freight and AC 3-tier passenger services — weigh on earnings, according to revised budget estimates.
Under the Revised Estimates (RE) released in the Union Budget process, the Railways’ gross traffic receipts for FY26 are projected at ₹2.78 trillion, falling short of the ₹3.01 trillion Budget Estimate (BE) — a gap of about ₹23,000 crore.
Officials attribute the shortfall largely to weaker than anticipated performance in two key revenue generators:
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Coal freight revenue — traditionally the backbone of freight earnings and accounting for over half of freight income — is expected to decline by around 12% compared with the BE, as coal demand moderates and shorter average hauls reduce revenue gains.
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AC 3-tier passenger segment revenue, the largest contributor within passenger services, is forecast to fall 27% below targets, reflecting lower ridership and subdued demand compared with projections.
While overall goods loading targets remain unchanged, freight revenue is now anticipated to be down by about ₹10,000 crore against the BE, and passenger services are expected to contribute ₹12,800 crore less than planned.
Union Rail Minister Ashwini Vaishnaw noted that revenue targets are deliberately ambitious at the start of the year, and actual freight and passenger revenues have still grown compared with previous years — despite falling short of BE targets.
The shortfall comes amid broader structural shifts in Indian Railways’ revenue mix, where freight’s share has been gradually declining due to passenger fare rationalisation and competitive pressures, and reforms such as freight rate rationalisation are being recommended to enhance long-term revenue stability.
Railways is simultaneously planning continued infrastructure investment and cost optimisation to bolster future earnings, even as policymakers balance revenue shortfalls with ambitious expansion goals for FY27 and beyond.