In a rather unusual move, Railway Minister P.K. Bansal on Wednesday announced an across-the-board hike in passenger fares less than two months before presenting the Railway budget. The hike comes into effect from January 21. As a consolation, however, Mr. Bansal said there would be no further fare hike in the budget.
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.
For instance, a passenger travelling from New Delhi to Chennai by the Tamil Nadu or G.T. Express will have to pay an extra Rs. 91 for a second class ticket, Rs. 132 for a sleeper ticket, Rs. 312 for AC-3 tier, Rs. 132 for AC 2-tier, and Rs. 223 for AC first class on the basic fare. (The increase in AC 2-tier and AC first class fares is in addition to the hike made in April. The hike proposed in the rail budget then for other classes of travel was rolled back immediately thereafter.)
Interestingly, the hike effected by Mr. Bansal for the economically sensitive classes is more than what was proposed by his predecessor Dinesh Trivedi (of the Trinamool Congress) in his budget for 2012-13. But Mr. Trivedi incurred the wrath of his party chief, Mamata Banerjee, for his across-the board-hike, and lost his job.
The second ordinary and sleeper classes, heavily patronised by the economically weaker sections, had remained untouched for a decade.
Non-committal on freight
To repeated queries, he declined to say whether there would be any hike in freight charges too. “I am not saying anything [about freight charges] either way. We are not saying anything now.”
Mr. Bansal said, “We will go around explaining to the people the need for the increase [in passenger fares]. I am sure they 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.”
The fare hike, he said, 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.
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.
