“We cannot let the Railway system collapse”

Railway Minister P.K. Bansal on Wednesday said the passenger fare hike to be effected from January 21 was expected to yield Rs. 6,600 crore a year. During the current financial year (up to March 31), it would help the Railways mop up an additional Rs. 1,200 crore.

The increase ranges from two paise a km in the basic fare for second class ordinary (suburban) passengers to 10 paise a km for AC chair car and AC first class.

Mr. Bansal said, “ I am sure people will understand the financial problems faced by the Railways. ……We cannot let the Railway system collapse.”

Even as losses in the passenger segment were relentlessly going up, revenue from freight was falling due to a general slowdown in the economy, he said. As of December 2012, coal movement, the bread and butter of the Railways, was down by 13 million tonnes.

“We could not have waited till the Budget. A careful assessment of our financial situation showed that unless we hiked the fare immediately, we would not be able to carry on with some of our essential safety and passenger amenity-related activities.”

Noting that passenger fares had not been hiked over the last 10 years except for the first, AC two-tier and AC first/executive classes in April last, Mr. Bansal said the losses in the passenger segment were expected to go up to Rs. 25,000 crore this financial year, a four-fold increase over the figure of Rs. 6,159 crore in 2004-05. In contrast, input costs increased by 10.6 per cent every year during the period between 2004-05 and 2010-11.

“Cross-subsidy through business [is also] no more viable in view of the fast-evolving competition from other modes of transport.”

Mr. Bansal said the Railways would do away with levying developmental charges on passenger tickets, and all chargeable fares would be in multiples of Rs. 5.

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