Hike in railway passenger fares almost certain

Faced with a deficit of over Rs 20,000 crore in the passenger segment, the railways is keen to raise passenger fares by 5-10 paise per km in the coming months to generate the revenue of about Rs4,000 crore.

The hike could come close on the heels of railways finalising the broader contours of the proposed Rail Tariff Authority (RTA), which would be placed before cabinet in January, reports PTI.

"The passenger fares should be hiked by 5 paise to 10 paise per km in the Rail Budget (2013-14). The financial condition of Railways is not good. We need funds, otherwise Railways will not survive," minister of state for railways K J Surya Prakash Reddy told PTI.

The other minister of state Adhir Ranjan Chowdhury also advocated an urgent hike in fare. "There is an urgent need for passenger hike as Railways' financial condition is bad," he said.

Railways has incurred a loss of Rs 22,000 crore in the passenger segment this year, a Rs4000 crore increase in deficit over the last year. However, a senior railway official said, "A decision is yet to be taken whether to increase the passenger fare before the Rail Budget or announce it in the budget."

Asked about the quantum of possible hike, the official said, "It is likely to be between 10 per cent and 15 per cent," something which former Railway Minister Dinesh Trivedi had proposed in the last Rail Budget. Reviewing the performance of the railways, the Prime Minister's Office has asked the chairman of the Railway Board to finalise and submit its recommendations on the constitution of proposed RTA by 31 December.

RTA is expected to suggest the quantum of hike in passenger fare and freight tariff. "We are working on it (RTA)," said railway minister Pawan Kumar Bansal when asked about the progress on the matter.