Hike In Rail Fares

The United Progressive Alliance government on January 9 announced an across-theboard hike in railway fares, putting an extra burden on passengers from the midnight of January 21. Ten months after withdrawing its Budget proposal to raise passenger fares under political pressure from the Trinamool Congress, Railway Minister Pawan Kumar Bansal announced that the decision taken after a decade would generate additional revenue of Rs 6,600 crore every year. Fares of ordinary second class (suburban) trains will go up by 2 paise per km, while passengers will have to pay an extra 3 paise per km for non-suburban travel. Travel by second class mail and express trains will be costlier by 4 paise per km, while it will be expensive by 6 paise in sleeper class. Travelers in AC chair car and AC three tier will pay 10 paise more per km, first class 3 paise, AC two tier 6 paise and AC first class 10 paise more.

The fares for first class, AC two tier and AC first/executive class have already been raised by 10, 15 and 30 paise per km, respectively, in the current year’s Budget. On the rationale behind the hike, the minister said it was necessitated by mounting losses, rising input costs and lower than anticipated earnings from freight that cross-subsidised passenger travel. “Basic fares were not revised in the past 10 years, except for the increase in respect of the first class, AC first and AC two-tier travel. “Losses in the passenger segment, which were Rs 6,159 crore in 2004-05, rose to Rs 19,964 crore in 2010-11 and were expected to touch Rs 25,000 crore in the current financial year,” the minister said. Stressing that cross-subsidy through freight business was no longer viable in view of growing competition, Bansal said by the end of December 2012, the Railways registered a shortfall of 13 million tones in carrying load. The decision to restrict the fare hike in the last Budget to the uppermost classes meant that additional resources could be raised from only 0.3 per cent of the total 2.30 crore passengers it carried, he added. This contributed just 10 per cent to the total earnings from the passenger segment.

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