Railways funds upgrades from scrap and non-fare revenue

Indian Railways crossed its scrap-sale target and lifted non-fare earnings to a five-year high, paying for station upgrades without touching passenger fares.

What happened

• The Ministry of Railways reported that it earned ₹6,813.86 crore from scrap sales in FY 2025-26, beating its target of ₹6,000 crore for the year.
• In the previous year, FY 2024-25, scrap sales reached ₹6,641.78 crore against a ₹5,400 crore target — so the network has now overshot its scrap goal two years running.
• Non-Fare Revenue (NFR) hit ₹777.76 crore in FY 2025-26, above the ₹720.85 crore estimate for the year (about 107.9% of target) and up from ₹686.86 crore in FY 2024-25.
• NFR has grown from roughly ₹290 crore in FY 2021-22 to ₹777.76 crore — an increase of about 168% over five years.
• The earnings are being channelled into the passenger experience: station redevelopment, multi-level car parking, medical care centres, nursing pods, health kiosks, gaming zones, and a premium co-working space and digital lounge designed by Western Railway.
• On the wellness side, 120 of a planned 150 Pradhan Mantri Bhartiya Janaushadhi Kendras (PMBJKs) have been opened at stations, and 22 premium brands have been allotted commercial space through NFR arrangements.
• The framing of the announcement is deliberate: all of this has been delivered without increasing passenger ticket fares.

Background & context

Indian Railways is one of the largest railway systems in the world under a single management and is run as a departmental commercial undertaking of the Government of India through the Ministry of Railways, with the Railway Board as its apex executive body. Its finances have a structural problem that this announcement speaks to directly: passenger services are heavily cross-subsidised by freight, the operating ratio (working expenses as a share of traffic earnings) routinely sits close to or above 95 paise spent per rupee earned, and politically sensitive passenger fares are difficult to raise. That leaves the network reliant on the Union Budget's gross budgetary support for its capital expenditure and looking for earnings that do not depend on the farebox.

Two such earning streams sit behind today's figures. The first is scrap monetisation — the disposal of condemned rolling stock, released rails and sleepers, scrap from workshops and production units, and surplus stores, increasingly sold through transparent online e-auctions run on the Indian Railways e-procurement system. Scrap is not "new" income in an accounting sense, but converting idle, depreciating material into cash improves both the balance sheet and asset hygiene at depots and yards. The second is Non-Fare Revenue, the formal policy category for everything Railways earns outside passenger fares and freight charges.

The NFR push has an institutional lineage. The Railway Budget of 2015-16 set an ambition to raise the share of non-fare sources in total revenue, and in 2017 the Ministry created a dedicated Non-Fare Revenue Directorate in the Railway Board, followed by a series of NFR policies covering content-on-demand, train and station branding, advertising rights, rail display networks and the commercial use of station and trackside land. The current numbers — NFR rising from about ₹290 crore to ₹777.76 crore in five years — are the cumulative result of that directorate-led commercialisation, even though NFR still forms only a small fraction of the Railways' total earnings, which run into lakhs of crore annually.

The wellness component plugs into a separate flagship. The Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), launched in its present form in 2008 and relaunched in 2015, is the Department of Pharmaceuticals' scheme to sell quality generic medicines at low prices through dedicated outlets called Pradhan Mantri Bhartiya Janaushadhi Kendras (PMBJKs). It is implemented by the Pharmaceuticals & Medical Devices Bureau of India (PMBI). Placing these Kendras inside railway stations marries a railway commercialisation goal with a public-health welfare scheme: the station gets a service amenity and licence revenue, and the Janaushadhi network gets high-footfall retail space. The release notes that 50 such station Kendras were inaugurated by the Prime Minister on 12 March 2024, instructions followed for 100 more (of which 18 were inaugurated on 13 November 2024), and 120 of 150 are now open.

For Prelims

• Scrap sales FY 2025-26: ₹6,813.86 crore against a ₹6,000 crore target (FY 2024-25: ₹6,641.78 crore against ₹5,400 crore).
• Non-Fare Revenue FY 2025-26: ₹777.76 crore vs ₹720.85 crore target (~107.9%); FY 2024-25 was ₹686.86 crore.
• Five-year NFR growth: ~₹290 crore (FY 2021-22) → ₹777.76 crore (FY 2025-26), about a 168% rise.
• What NFR is: railway earnings from sources other than passenger fares and freight — advertising and branding, station and train naming/display rights, content-on-demand, parking, asset and land commercialisation, and licence fees from outlets.
• Administering chain: Ministry of Railways → Railway Board → dedicated Non-Fare Revenue Directorate (created 2017), with zonal railways executing on the ground.
• PMBJK at stations: 120 of 150 opened; 50 inaugurated by the PM on 12 March 2024, 18 more on 13 November 2024.
• PMBJK belongs to: the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), run by the Department of Pharmaceuticals through the Pharmaceuticals & Medical Devices Bureau of India (PMBI) — a welfare scheme for affordable generic medicines, not a railway scheme.
• Premium brands via NFR: 22 allotted across zones; Western Railway designed the premium co-working space / digital lounge concept (Wi-Fi, workstations, charging, conference facilities).
• Amenity menu funded: multi-level car parking, medical care centres, nursing pods, health kiosks, gaming zones, plastic-bottle crushing machines, platform branding.
• What it is NOT: NFR is not the same as freight or passenger earnings, and a "scrap sale record" is a monetisation of existing assets, not a tariff increase — fares were explicitly left untouched. PMBJKs are not railway-owned pharmacies; they are Janaushadhi outlets of the Department of Pharmaceuticals hosted on railway land.
• The full earnings set to remember: Indian Railways' revenue splits into (1) passenger fares, (2) freight (its dominant earner and cross-subsidiser), (3) sundry/other coaching earnings, and (4) Non-Fare Revenue. Scrap sale proceeds are a separate receipt from disposal of materials, distinct from the four traffic-earning heads.

Why it matters

The core problem this addresses is the Railways' thin financial cushion. Because passenger fares are politically rigid and freight already carries the cross-subsidy load, the network needs earnings that do not require a tariff hike or a larger budgetary handout. Scrap monetisation and NFR are exactly that — they convert idle assets and unused commercial potential (wall space, station forecourts, surplus land, footfall) into cash. The figures here are modest against Railways' total earnings, but the direction matters for an exam answer on infrastructure financing: it is an example of an Indian public enterprise diversifying revenue and pursuing asset monetisation rather than relying solely on fares or the exchequer, echoing the logic of the National Monetisation Pipeline.

It also illustrates a governance design where one ministry's commercial objective is fused with another's welfare scheme. By hosting Janaushadhi Kendras, the Railways simultaneously earns licence revenue and improves a public amenity, while the affordable-medicine programme gains guaranteed high-traffic locations. For the aspirant, that is a clean example of convergence — a recurring theme in questions on welfare delivery and last-mile access. The station-experience spend (parking, medical care, nursing pods, digital lounges) connects to the wider station-redevelopment agenda and to the idea of the railway station as a multi-service public hub rather than a bare transit point.

For Mains