“In GOD WE TRUST”

A Project Report on‘SWOT ANALYSIS of Indian Railways’

Submitted By Submitted ToManoj Prof. Harmesh LalB.Com Final Head.of Comm.Dept.Roll No. 1106

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I Manoj Kumar , Student of

B.Com Final Submitting this Presentation on

‘Swot Analysis of Indian Railways’

To Our Indain Economy Prof. Harmesh Lal.

I am Heartly Thankful to my Subject Teacher

Prof. Harmesh Lal And Our Respected

Principal Mirs. Amrit Varsha who provide

Us Such a helpul Enviorenment to creat this

Presentation .

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<C o n c e p t > <P a g e n o .>

1. Introduction 4

2. Important Facts 5

3. SWOT Analysis 7

4. Strenth 8

5. Weakness 10

6. Opportunities 12

7. Threats 15

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An Introduction

Indian Railways , abbreviated as IR, is the state-owned railway company of India, which owns and operates mostof the country's rail transport. It is overseen by the Ministry ofRailwaysof the Government of India.

Indian Railways has one of the largest and busiestrail networks in the world, transporting over 18 millionpassengers and more than 2 million tonnes of freight daily. It isone of the world's largest commercial or utility employers, withmore than 1.4 million employees. The railways traverse the lengthand breadth of the country, covering 6,909 stations over a totalroute length of more than 63,327 kilometres (39,350 mi). Asto rolling stock, IR owns over 200,000 (freight) wagons,50,000 coaches and 8,000 locomotives.

Railways were first introduced to India in 1853. By1947, the year of India's independence, there were forty-two railsystems. In 1951 the systems were nationalised as one unit,becoming one of the largest networks in the world. IR operatesboth long distance and suburban rail systems on a multi-gauge network of broad, metre and narrow gauges. It alsoowns locomotive and coach production facilities.

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SOME MISCELLANEOUS FACTS ABOUT INDIAN RAILWAYS.

SOME FACTS:

The total route length of Indian railway is approximately63,000 kms.

The first electric train was opened in February 1925 onMumbai suburbanrailway on Mumbai Victoria Terminus (VT) –Kurla branch line.

As on 31st march, 2004 the electrified route was 17,503kms.

The Indian railway largest in the Asia and second largest inthe world afterthe USSR.

The total number of railway station in India is more then7,000.

The Indian railway operates approximately 7,525 trains’ dailycovering7,031 railway stations.

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The largest platform in India is at Kharagpur. The length is2,733 feet. It is

situated in west Bengal.

The longest railway tunnel is Konkan railway tunnel i.e. 65kms.

The longest rail bridge is across Godavari River. The lengthis 10,052 feet.

The largest marshalling yard is at Mughalsarai.

The third class in the Indian railway was abolished in 1974.Now there are seven classes- AC-1st, AC-2T, AC-3T, Sleeper,AC chair car, first class and second class.

Railway set up a fund in 1974 to give financial assistance tovictims of railway accidents.

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On Indian Railways

As far as we will go to SWOT Analysis onIndian Railways we must clear the meaning of SWOT. Though atthe first look the word ‘SWOT’ seems too simple, but it is awide term used as S.W.O.T which contains all the necessary dataor information of a Business Organization, Firm, OthersInstitutions etc.

S.W.O.T contains four different aspects in it, inwhich ‘S’ stands for ‘STRENTH’ of the concern object, ‘W’ standsfor ‘WEAKNESS’ , ‘O’ stands for ‘OPPORTUNITY’ and ‘T’ standsfor ‘THREATS’ for that concern object.

As we apply this ‘SWOT’ concept on IndianRailways we see that there is a solid strength of Indian Railwaysin itself as well as weaknesses of it. It has great opportunities inits circle as well as threats from other private sector efforts. Inother words we can say that Indian Railways is a widely usedterm in Indian Economy. It alone covers more than 25% ofIndian Economy Structure.

All the four aspects of SWOT in the mannerof Indian Railways are explained and described further.

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A LARGE NETWORK OF 7000 STATIONS EXISTS IN THECOUNTRY.

A SUBSTANTIAL MARKET SHARE EXISTS, IN PASSENGERSEGMENT. FOR A COUNTRY OF 1000 MILLION PEOPLE WITHLOW PURCHASING POWER RAILWAY SYSTEM IS MORESUITABLE.

FOR LONG DISTANCE AND BULK SECTOR RAILWAYS IS THEMOST ECONOMICAL COMPARATIVELY SAFER MODE OFTRANSPORT.

PETROLEUM PRODUCTS PROCURED THROUGH IMPORTS AREVERY EXPENSIVE AND THUS ELECTRICITY BASED RAILWAYSYSTEM WILL ALWAYS HAVE AN EDGE ON PARAMERTERS OFPOLLUTION, ENERGY COST, ENVIRONMENTAL FACTORS.

AVERAGE LENGTH OF HAUL BEING LARGE BREAK EVENDISTANCE FEASIBLE FOR RAILWAY SYSTEM IS AVAILABLE.

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The budget outlay for financial year2006-2007 was Rs. 23,500 Crore (~ USD 5.1billion) and is expected to be higher in 2007-2008, with the IR planning substantial investmentsin fixed infrastructure and rolling stock to achieveefficiency and productivity gains in freightoperations that could in turn generate significantmultiple benefits for the economy as a whole.

The 2007-08 Railway Budget is likelyto focus on improving passenger servicesextensively. Indian Railways is looking atsignificantly improving passenger amenities, includingrefurbishment of the design and look of stations.Work to convert 16 major railway stations intoworld-class ones is expected to be set intomotion in the this fiscal, including separatingpassenger handling areas from commercial areas,like in airports.

Greenfield passenger terminals onsimilar lines are also being contemplated and couldoffer more opportunities for development throughthe PPP route.

The Railways is also activelyconsidering a proposal to re-design the air-conditioned three-tier coaches for general trainsand increase its passenger carrying capacity.Changes in the design could increase the capacityof an AC 3-tier coach in general trains to 81 fromthe existing 64.

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THE ORGANISATION IS PRODUCTION ORIENTED.

THERE IS OVER EMPHASIS ON MAXIMISING PKMS,NTKMS.

MARKETING IS PERIPHERAL ACTIVITYAND COMMERCIAL DEPARTMENT ISBASICALLY ENGAGED IN SELLINGBUSINESS ONLY

CUSTOMER FOCUS IS MISSING ANDCUSTOMER SATISFACTION IS NOT ANORGANISATIONAL MISSION.

INDIAN RAILWAYS IS LOOSING ITSMARKET SHARE IN PASSENGER ANDFREIGHT BUSINESS.

THERE IS CAPACITY CONSTRAINT - HOWTO BALANCE DEMAND AGAINST AVAILABLECAPACITY.

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In spite of all various advantage andspecialties, we can not ignore that there are manyserious drawback of Indian railways. They are asfollows:

Outdated technology oflocomotive :

The rail engines used to run the trains are veryold and outdated technology. So they require muchmaintains and they do not give proper return, asthey do not performefficiently. There is immediateneed to change the engines by new and updatedones.

Small and inadequate railnetworks :

As India is world’s second largest rail networkscountry but if we look by consideringrequirements of economy and size of country thenit is not enough. Further India’spopulation which is increasing leads pressure onsuch facility. So there must be extensionin the rail networks as per the demand andrequirements.

Problem of financial crunch :The railway is facing the problem of financialcrunch. The conventional methods ofincreasing the net revenue, like rising of tariffs andexpenditure control are inadequate forgenerating the levels of investment required.

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MEASURES TO IMPROVE FREIGHT BUSINESS:

Reduction in unit cost offreight traffic due to increasein loading capacity of

wagons and some other measures.

Additional loading of 4 to 8tonnes per Wagons per adds100 Million Tonnes to

loading capacity with resultant Revenue generation ofRs 5000 Cr.

Validity of brake powercertificate for CC rakesincreased from 6000 to7500

km.

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Wagon manufacture to increaseby about 25%

Production of electriclocomotive to increase by 17%and diesel locomotive by

5%.

REDUCTION OF LOSSES IN PASSENGER BUSINESS:

Increase Volumes reduced unit costsstrategy to be adopted in the passenger

business also.

Cut down losses in the coaching servicesby about Rs 1000 Cr in the coming

year and by 50% in the next three years byincreasing the number of coachesand occupancy of trains , reducing travel time andreducing losses in thecatering and parcel segments.

Over 200 mail/express trains to be madesuper fast.

Journey time of a majority of theShatabdis, Rajdhanis and of certain

mail/express trains likely to reduce.

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The number of coaches in about 190 popularpassenger carrying trains to be

increased up to 23-24 coaches enabling railway toearn Rs 200Cr additionallyevery year.

Platform length at 200 stations to beincreased at a cost of Rs 60 Cr

Up gradation of lower class passengers tohigher class without any additional

payment introduced on all Rajdhanis andmail/express train.

OPPORTUNITIES FOR INDIAN RAILWAY ININCREASING THEIR PROFIT FROM MARKET.

0%

20%

40%

60%

80%

100%

1950-51 1996-97

Shift of Traffic from Rail to RoadFreightRail

FreightRoad

PassengerRail

PassengerRoad

Year Freight Passenger

Rail Road Rail Road

1950-51 89% 11% 80% 20%

1996-97 40% 60% 20% 80%

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THE ORGANISATION IS PRODUCTION ORIENTED.

THERE IS OVER EMPHASIS ON MAXIMISING PKMS,NTKMS.

MARKETING IS PERIPHERAL ACTIVITY ANDCOMMERCIAL DEPARTMENT IS BASICALLYENGAGED IN SELLING BUSINESS ONLY

CUSTOMER FOCUS IS MISSING ANDCUSTOMER SATISFACTION IS NOT ANORGANISATIONAL MISSION.

INDIAN RAILWAYS IS LOOSING ITS MARKETSHARE IN PASSENGER AND FREIGHTBUSINESS.

THERE IS CAPACITY CONSTRAINT - HOWTO BALANCE DEMAND AGAINST AVAILABLECAPACITY.