Railways is exploring the possibility of increasing passenger fares to tide over its financial problems and improve safety-related infrastructure.
Recently a Parliamentary panel had suggested a hike in fares to offset the inflationary trend while CAG had stressed on rationalisation of fares to improve its finances.
“Nothing has been finalised yet and it is just a thinking,” Railway Minister Dinesh Trivedi told PTI.
Asked what would be the quantum of hike and the time by which it would be done, Trivedi said, “No decision has been taken to this effect.”
Earlier, he had said, “It (revision of fares) would be thought of without affecting the general class which is used by poor people whose affordability has to be taken into consideration.”
Sources said the hike could be linked with the fuel prices including diesel and electricity cost which accounts for close to 18 per cent of its annual expenditure.
The proposal to align the freight and passenger fare with market prices was, in fact, made by the Railway Minister at the full Planning Commission meeting last month which was presided over by Prime Minister Manmohan Singh.
He is believed to have proposed more dynamic freight and passenger fare aligned with market prices during the full Planning Commission meeting.
The Railway Minister’s suggestion was among the various proposals given by him during the meeting which approved the Approach Paper for the 12th Five Year Plan.
Sources said with the passenger fares remaining stagnant, railways are facing a severe fund crunch in the wake of high inflation and competition from road and air sectors.
Passenger fares contribute more than 30 per cent of railways’ total revenue generation.
Former Chairman of Railway Board Vivek Sahai, while appearing before Railway Convention Committee, had earlier suggested 10 to 15 per cent hike in fares across all classes to mop up Rs 2000 crore.
The CAG report on Railways for 2010-11 tabled in Parliament last Friday had suggested that “the way forward for railways to improve its finances is to rationalise both freight and passenger tariffs.”
Interestingly, railways own unions have favoured a revision in fares in face of railways’ worsening finance position.
Rationalisation of passenger fares in all classes is the need of the hour, said Shiv Gopal Mishra, All-India Railwaymen’s Federation General Secretary.
In its report, the CAG had noted that Railways was unable to meet its operational cost of passenger services and other coaching services, with the result that in 2008-09 loss on operation of passenger and other coaching services stood at Rs 15,268.41 crore. The loss in the previous fiscal was Rs 7,493.50 crore.
All category of passenger services except AC chair car and AC three tier incurred losses in 2009-10, the report said.
The CAG report further said net revenue surplus of the railways declined from Rs 13,431 crore in 2007-08 to Rs 75 lakh in 2009-10. Depreciation reserve fund, development fund and pension fund closed in 2009-10 with negligible balances of Rs 4.98 crore, Rs 5.41 crore and Rs 1.24 crore respectively. Operating ratio (percentage of working expenses to traffic earnings) deteriorated to 95.28 per cent in 2009-10 from 90.46 per cent achieved in 2008-09.
Many members of the parliamentary panel on Railways had strongly advocated hike in passenger fares within reasonable limits not only to offset the inflationary trend and diesel price increase but also to plough back at the same time the resources raised for the benefit of passengers and improvement in rail system.
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