The Railways has decided to stick to its policy of raising freight charges with effect from October, but passenger fares are likely to remain same, apparently in view of the peaking electoral climate.
Minister of State for Railways Adhir Ranjan Chowdhury stressed on the impending hike, saying it was inevitable in the aftermath of the rising diesel prices, the slumping value of the Rupee and little or no investment from the private sector in railway infrastructure.
The rate hike would be in the form of the dynamic policy adopted to pass on the burden of fuel prices biannually as announced in the Railway budget. The fuel adjustment component (FAC) would be adjusted every six months with the next one due on October 1.
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Inaugurating a conference organised by Assocham, Mr. Chowdhury said the Railways had to stick to the pronounced decision in view of its poor financial condition. He, however, ruled out applying the FAC on passenger fares, the burden of which was spared when the policy was first implemented in April that saw freight rates going up by 5.7 per cent. The Railways absorbed about Rs. 850 crore on this account, though more than this amount was recovered from passengers through various other charges, he said. The Centre has, however, decided to institute the Rail Tariff Authority. After approving the proposal, the Cabinet had directed the Law Ministry to get it established through an executive order avoiding the long legislative process, giving the indication that a fare hike on the basis of its recommendation could not be ruled out.