The Railway Budget is likely to see hike in passenger fares due to increase in energy cost by nearly four per cent during the last one year. A top Railway source said that the proposal for the fare hike was moved in December itself, and the subsequent review meeting agreed that “some burden has to be shared by the people”. While the fares of reserved sleeper class may be increased by 7-10 per cent, AC class fares will go up by five-ten per cent.
“As part of the pro-reform approach of the Government, the fuel cost adjustment component-linked tariff revision could be accommodated in the Rail Budget. This will help introduce better service to passengers, who, according to an internal survey, will not mind paying a little more if they are served better,” said a top Railway Ministry official.
Railway Minister Suresh Prabhu, a technocrat-turned-politician, will present the Railway Budget in Parliament on February 26. Prabhu has already met Members of Parliament in groups to apprise them of the immediate need for Rs21,000 crores to meet the Railways’ basic requirements. “Ever since he assumed charge, Prabhu has taken several steps to put the Railways, which is facing massive fund and resource crunch, on track,” added the official.
The fare and freight revision linked to fuel and energy cost is done twice a year. The last revision was done in June 2014 when passenger fares were revised by 4.2 per cent and freight rates by 1.4 per cent. 1.50 per cent drop in passenger bookings in this fiscal has affected the volume of finance from fares. This is also one of the factors to revise the fare structure.
The official said that several safety and security measures are being adopted and these would come at a cost. “There is also a need for major investment to boost the infrastructure and such things will be reflected in the budget speech,” added the official. At a Railway Ministry’s event recently, Prabhu had expressed serious concern about the financial health of the national transporter and said it was “too close for comfort”. He highlighted the urgent need for massive investment to meet the safety requirement and upgrading in the rail infrastructure. “Railways require big investment. There is no fund for investment. There is requirement of Rs 6 lakh crore to Rs 8 lakh crore for completion of announced projects,” Prabhu had said.