Railways mulling passenger fare hike

By Amit Agnihotri, IANS,

New Delhi : People, already reeling under spiralling prices of essential commodities, should brace for another hole in their pockets with the Indian railways considering an 8-12 percent hike in passenger fares.

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The move comes as a desperate bid by the railways to pull itself out of the red and the hike could be across the board.

“We are actively considering an increase in passenger fares for all classes,” Railway Board chairman Vinay Mittal told IANS. “The hike should happen at the earliest. We have already lost five months this financial year.”

Indian Railways, which runs 10,500 trains and ferries 2.2 crore passengers each day, last hiked passenger fares in 2002-03. As part of fare rationalisation in 2002-03, minimum fare for second class mail and express trains went up from Rs.15 to Rs.16. For long distance trains up to 341 km, the hike ranged from Re.1 to Rs.6.

Explaining his point, the railway board chairman said the “investible surplus” of Rs. 13,000 crore this year was expected to drop to Rs.4,000 crore after the government revised its economic growth target from 8 percent to 7.5 percent. He felt that this would affect the railways’ development plans.

Railways Minister Dinesh Trivedi, sources said, is seized of the matter. Once he approves the fare hike, the proposal will be put up before the cabinet.

According to Mittal, the fare hike is necessary to match the recent increase in the fuel bill, including diesel and electricity cost, which is around 18-20 percent of its annual expenditure.

An inflated fuel bill would mean the planned railway expenditure of Rs.73,000 crore for 2011-12 would go up to Rs.78,000 crore by the end of the financial year, Mittal said.

However, even as it plans a hike in passenger fares, the railway ministry is “equally concerned over the quality of services it provides”.

“Our feedback shows, while the passengers won’t mind paying a little extra, they do expect clean and efficient services,” Mittal said. “Dirty toilets in the trains and the quality of linen provided has been a concern.”

The parliamentary railway convention committee and the planning commission, too, have been suggesting a hike in passenger fares to deal with its financial crisis.

Concerned over the issue, the All India Railwaymen’s Federation wrote Aug 31 to the railway minister to increase passenger fares.

AIRF general secretary Shiva Gopal Mishra said that there had been no hike in passenger fares for the past eight years. Instead, Re.1 has been reduced in each of the last three years. The “passenger subsidy” works out around Rs.20,000 crore, a number likely to go up this year.

“A fuel surcharge may be introduced by the ministry,” Mishra told IANS. “It should be kept flexible and changed as prices of petroleum products drop.”

He said that better financial health of the railways would mean better health of its employees.

(Amit Agnihotri can be contacted at [email protected])