The Indian Railways is working on a plan to gradually “rationalise” fares for both passenger trains as well as freight trains, Railways Board Chairman and CEO V. K. Yadav said on Thursday.
Speaking at a virtual press conference, he added that the Ministry of Railways will soon notify “a very small” user fee, which will be levied on travellers to aid development of select railway stations.
“...We need to look at how the fares can be rationalised for both passenger and freight...We have made a plan for this, and we are slowly working towards it and fares will be gradually rationalised,” Mr. Yadav said, replying to a query during a virtual press conference.
Niti Aayog CEO Amitabh Kant, who was also part of the conference, added that passenger rail fares in India are very highly subsidised. As a result, freight train rates had to be increased, leading to a situation where freight has moved from the railways to roads. “...70% of India’s freight moves through the road. So there has to be a balance. The right balance will have to be struck,” Mr. Kant said.
For passenger trains, the Railways had revised the basic passenger fare, increasing it by up to 4 paise per kilometre from January 2020 onwards. This was the first fare revision since 2014-15.
Replying to a query, Mr. Yadav stressed that while private train operators, who are expected to begin operations in the country by April 2023, will be free to set the fare for tickets, they will need to compete with airways as well as highways. Hence, the fares will not be high.
“Overall, I think this [private train operators] is a win-win for the country. Let us not look at just one segment, look at the country... new technology, new players, efficiency comes in...and over a period of time... greater play of competition...will reduce fares both on the freight and passenger side for the country,” Mr. Kant said.
User charge
Mr. Yadav said the Railways will soon start charging a “very small amount” of user charge on select stations. “We will issue a notification for the user charge for stations, which will include stations that are getting redeveloped as well as which are not. This amount will be used to provide better facilities to users,” Mr. Yadav said.
He added that once the redevelopment of selected stations is complete, the user charge will go to the concessionaires. However, till the time redevelopment is not done, the money will go to the Railways and will be used for upgrading facilities. “It will be an affordable amount, but it is important to levy if we want to provide world class facilities similar to how airports were developed. We want to upgrade all our major railway stations,” Mr. Yadav added.
He, however, added that the charge will not be levied across all 7,000 stations, but in about 10%-15% of the stations, where the footfall of passengers is expected to increase over the next five years.
