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Indian Railways, Asia’s largest and world’s second largest rail network

under a single management, has been contributing to the industrial and economic landscape for over 160 years. There are two main segments of railways – freight and passenger. The freight segment accounts for roughly 70% of revenues and passengers 30% of revenues. The total route length of railways was 64 thousand kilometers in 2009–10, out of which 19 thousand kilometers were electrified. During 2009–10, it carried 7200 million of passengers and 890 million tonnes of freight traffic.



  1. The existing technology of both electric and diesel locomotive is very old.
  2. The railway network is smaller and inadequate vis-à-vis the requirements of the economy.
  3. The railway is facing the problem of financial crunch.
  4. Because of social responsibilities, railway is forced to operate a number of unremunerative lines and suffers heavy losses. Often, essential goods like foodgrains, fruits and vegetables have to be carried at a loss.
  5. Railway also suffers from overcrowding and poor passenger services.

Road Transport

The Indian road network is second largest in the world. At the beginning of the first plan, India had only 157000 km of surfaced roads. Today India has a total road length of 3.34 mn km. Out of which more than half is surfaced.


The National Highways now encompass a road length of 66590 km, and carry more than 40 per cent of the total road traffic. The rural roads network connects around 65 percent of all-weather roads. Road occupies crucial position in the transportation matrix of India as they carry nearly 65% of freight and 85% of passenger traffic.



  1. The road length is inadequate
  2. Interior areas and hilly tracts remain to be linked with roads.
  3. Large tracts of rural roads are mud roads, which cannot be used for heavy traffic.
  4. A number of urban roads are also poorly maintained.

Water Transport


Water transport can be divided into inland water transport and shipping, coastal shipping and overseas shipping. India has a long coastline of 7,517 km, 12 major ports and 200 minor ports and a vast hinterland. Coastal shipping is very energy efficient and cheapest mode of transport for carrying bulk goods (like iron and steel, iron-ore, coal, timber etc.) over long distances. However, there had been a sharp decline in coastal shipping operations during 1960s and 1970s. The Gross Registered Tonnage (GRT) fell from 0.31 million in 1961 to 0.25 million in 1980. However, there was an improvement in the coastal shipping in 2001 as coastal tonnage rose to 0.70 million GRT.

The main factors for poor growth of coastal shipping have been:

  1. high transportation costs,
  2. port delays,
  3. over-aged vessels,
  4. lack of mechanical handling facilities,
  5. imbalance in coastal traffic movement and,
  6. slow handling of the cargo at ports. These inflict heavy losses on shipping companies.

India’s overseas shipping has improved over the planning period. The country has the largest merchant and shipping fleet among developing countries and ranks 20th in the world in shipping tonnages. As compared to 1.92 million GRT at the time of independence shipping tonnage was 10 mn million GRT in, 2008-09. The fleet at the end of March 2002 was 1040 vessels. The 12 major ports carry about three-fourth of the total traffic, with Kandla as the top traffic handler in each of the last three years.


Problems Faced By Indian Ports

  • Operational constraints such as frequent breakdown of cargo handling equipment due to obsolescence.
  • Inadequate dredging and container handling facilities.
  • Inefficient and non-optimal deployment.
  • Lack of proper coordination in the entire chain.
  • Indian containers are costlier than other ports in the region for handling containers.

Air Transport


In the civil aviation sector, there are three parts – operational, infrastructural and development. The first is the operational. There are 10 scheduled passenger operators and two cargo operators in the country with the combined fleet size of 419 aircrafts. Indian Airlines and Air India were amalgamated with National Aviation Company Limited. With effect from November 2010, the name of National Aviation Company Ltd, has been changed to Air India Ltd.


The private sector is now playing a crucial role in the development of both airline and airport sector. Its market share in the domestic traffic during 2006 has reached 85% from 50% share earlier. Jet airlines emerged as market leader with share of 26.1%, followed by Kingfisher 19%.


Airport Authority of India manages 115 airports, including 11 international and 23 civil enclaves at the defense airports. Greenfield Airports of international standards are also constructed at Hyderabad, Bangalore and Goa. An international Greenfield airport is already operational at Kochi. Regarding regulatory cum development aspect, the Department of Civil Aviation, Government of India, is responsible for it. International services are governed by bilateral agreements. Due to the monopolistic nature of the airports and their economic importance, efforts are being made to set up an Independent Airport Economic Regulator for tariff setting and monitoring of performance against standards.


Domestic and international traffic grew by 21.8 percent and 13.6 percent respectively in the Tenth Plan. Domestic and international cargo would increase by 20 percent and 16 percent respectively during the 11th plan. This growth is the second highest in the world next to China.

Recent development in the Airline sector includes:

  1. Modernisaton of airports of Metro cities.
  2. FDI limit has been increased up to 100%
  3. A Civil aviation economic advisory council (CAEAC) has been set up to look into economic issues faced by the civil aviation sector.
  4. For seamless navigation of civil aircrafts, a GPS-aided GEO augmented Navigation(GAGAN) project is being implemented.

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