Read that against where we began. In 1950-51, the Railways carried close to 90% (about 89%) of the country’s freight. The network built to move the nation’s coal, grain, and steel has shrunk in nearly eight decades to a junior partner in its own core business. 

This is not a dip but a long and unbroken decades-long slide.

The Long Haul

The same erosion shows up in lead — the average distance over which a mode carries a tonne. Long hauls are rail’s natural stronghold: beyond 500-600 kilometres, a train is supposedly far cheaper and cleaner than a truck, and India’s freight travels far. 

Yet the Railways’ own average lead — net tonne-kilometres divided by tonnage — is stuck near 600 km. Road has moved the other way, carrying roughly 40% even of bulk traffic and consignments well over 1,000 kilometres that once belonged to rail. 

The red flags were raised decades ago.

The National Transport Policy Committee of 1980, chaired by B.D. Pande, was the country’s first comprehensive transport-policy review, commissioned in the shadow of the second oil shock. Its central prescription was an optimum inter-modal mix: the Railways, being the energy-efficient, high-capacity mode, should be the primary carrier of long-distance bulk traffic, with road playing a complementary, feeder and short-lead role rather than a competing one. 

It cautioned specifically against the wasteful diversion of long-haul traffic to road and called for coordinated national transport planning to prevent exactly the drift we now inhabit. 

Three decades on, the National Transport Development Policy Committee (NTDPC), or the Rakesh Mohan Committee, reiterated the concerns. It prescribed raising the railway investment from about 0.4% of the GDP to 0.8%, and then 1.1%; building six Dedicated Freight Corridors (DFCs); and 15 to 20 logistics parks with port and industrial-cluster links. Consequently, it recommended capturing the Fast-Moving Consumer Goods (FMCG), consumer-durable, IT, containerised-cargo, and automobile segments.

Road To Recovery

The Indian Railways’ 2019 vision envisaged 50% freight share by 2030, while the National Rail Plan placed it at 45% by 2051.

Yet, NITI Aayog's own latest modelling expects rail to recover only to 25% by 2070 under current policies, and 30% under an aggressive net-zero push. 

Worse still, the Railways surrendered much of their petroleum traffic to pipelines and roads years ago, are now losing iron ore to slurry pipelines such as the Kirandul–Visakhapatnam line, and have watched the share of cement and foodgrains drift down over the past decade.

Three failures compound it. 

The Railways never became the aggregator of “smalls” or the less-than-wagonload consignments a modern network consolidates at scale. That market went to road.

Further, the Railways failed to become a serious logistics mover. And they lost containers to the highway: domestic containers are barely 1% of rail traffic, containerised movement stuck at four to five, with road owning the door-to-door segment outright.

An Operational Revolution That Lost To Itself

Part of this plunge was self-inflicted. In the early 1980s, M.S. Gujral, Chairman of the Railway Board, pushed through the block-rake revolution: freight would move in full trainloads, doing away with the yard-based sorting and marshalling that had slowed wagons for a century. The turnaround quickened, transit times fell, and marshalling yards were wound down. 

It was hailed as an operational revolution. Yet even that has dimmed, with average goods-train speed stuck below 25 km/ph. 

In retrospect, it was also a commercial Waterloo. By staking everything on the rake load, the Railways walked out of the “smalls” — the piecemeal consignments that once carried the nation’s finished goods, cargo that cannot move in trainloads. That traffic did not vanish; it moved to the truck and never returned. The efficiency triumph of the 1980s hard-wired the market retreat of every decade since.

The forward task is to reverse the logic: not the old manual yards, but a modern, IT-enabled capacity to aggregate small consignments and re-enter the finished-goods economy.

Root-Cause Analysis

The central question demands a root-cause analysis: Why has a cheaper, far cleaner mode lost so decisively? 

The causes are structural, and that is why patchwork schemes have failed for forty years.

Firstly, cross-subsidy tyranny. The Railways overprice freight to underprice passenger travel. India’s fare-to-freight ratio is about 0.3 — among the world’s lowest, against 1.9 in Japan, 1.5 in Germany, and 1.2 in China. Over the last decade, freight rates rose about 91%, passenger fares barely 28%. In 2024-25, freight earned ₹1.71 lakh crore — nearly 65% of revenue — while passenger operations earned ₹75,367 crore and ran a heavy social-service loss. 

The second cause is speed and reliability: on a mixed network where passenger trains get priority, freight crawls at around 23-25 km/ph. 

The third is the terminal and first-and-last-mile deficit: rail moves rake to rake, commerce moves door to door, so the Railways offer half a solution at a full-service price. 

The fourth is a monopoly-era commercial culture — tariff rigidity, weak marketing, no ownership of key accounts, and no independent regulator to cut the subsidy knot. 

What Needs To Be Fixed

The cause is structural, and the resolution lies in structural reform. 

Firstly, cut the cross-subsidy knot. Move the fare-to-freight ratio decisively towards 1 through phased, transparent rebalancing; competitive tariffs are the precondition for all else.

Secondly, create an independent tariff regulator. Then corporatise freight as a business. A dedicated freight-and-logistics vertical with its own profit-and-loss account, marketing and key-account managers — a carrier that sells, not an administration that allots.

Further, monetise the completed dedicated freight corridors (DFCs) and build the rest on a war footing. With the Eastern and Western corridors now operational, run them to capacity, fast-track the proposed corridors and lift freight speed. Speed is market share.

The most significant structural reform lies in becoming the aggregator of “smalls” and fixing the first-and-last-mile via Gati Shakti: multi-modal and private freight terminals with integrated road haulage, for genuine door-to-door service rather than rake-to-rake.

Moreover, the containers have to be won back. The freight basket must be diversified beyond coal: court automobiles (including roll-on-roll-off), cold-chain, perishables, steel, cement and FMCG, so that the basket no longer hangs on one climate-exposed commodity.

Reliability is non-negotiable: Guaranteed transit-time contracts with penalties for delay.

And lastly, reform the institution and enforce the target. Draw private capital into wagons, terminals and rolling stock, and revive the Pande Committee’s coordinated-transport idea through PM Gati Shakti and the National Logistics Policy.

Moving Ahead

For nearly eight decades, the warnings were tabled and shelved. The truck did not defeat the train on merit alone; it was handed the field by a pricing structure, an operating culture and an institutional inertia. Unless the cross-subsidy is cut and the Railways learn to sell reliability instead of rationing wagons, the numbers will keep falling — and India will keep paying, in rupees and in carbon, for a national carrier that forgot how to carry the nation’s goods.

(The writer is a former civil servant. Views expressed are personal.)