Railways to hike fares early next year

The next Rail Budget to be presented early next year could contain a proposal for raising fares to pass on the burden of rising power cost to passengers.

The fuel adjustment component-linked tariff revision due in December will be effected in the Rail Budget in February and there is a need for upward revision as energy cost has gone up by over 4 per cent in the recent months, said a senior Railway Ministry official.

According to Railways' announced policy, fare and freight revision linked to fuel and energy cost are being done twice a year. The last revision was done in June wherein passenger fares were revised by 4.2 per cent and freight rates by 1.4 per cent.

Hinting at a possible fare hike, new Railway Minister Suresh Prabhu had said at a recent event that "some burden has to be shared by people."

Asked about the possibility of raising train fares to meet the growing expenses in Railways, Prabhu, known for his pro-reform approach, did not rule out the possibility saying "passenger service should be improved before increasing the fares. Safety cannot be compromised. There is a need for big investment. Some burden has to be shared by people."

Expressing serious concern over the Railways' financial health, Prabhu had said it is "too close for comfort" and highlighted the urgent need for massive investment to meet the safety requirement and upgrading in the rail infrastructure.

"Railways requires big investment. There is no fund for investment. There is requirement of Rs 6 lakh crore to Rs 8 lakh crore for completion of announced projects," he had said.

The minister, who is also meeting MPs in batches to make himself aware of their demands and aspirations before the Rail Budget, said to meet these demands, the requirement is about Rs 20,000 crore (Rs 200 billion).

Prabhu, after assuming charge, is learnt to have taken a series of steps to bring the national transporter reeling under massive fund crunch back on the track.

While the cross-subsidisation in passenger sector is hovering around Rs 26,000 crore 9Rs 260 billion), there is a fall in passenger bookings too. Passenger bookings have come down during April-November by 1.43 per cent as compared to the corresponding period last year.

The total number of passenger tickets booked during this period were 5581.33 million compared to 5662.54 million in the same period last year, according to Railway Ministry data.