Pitroda panel suggests 25% one-time rail fare hike
23 Jan 2012
A committee on modernisation and upgrading of Indian Railways (IR), headed by the prime minister's advisor Sam Pitroda has recommended that IR should hike passenger fares by 25 per cent at one go, and subsequently link it to inflation indices.
In a presentation to the Planning Commission ahead of the railways budget for the fiscal due next month, the Pitroda committee has said the funds could boost revenue by Rs60,000 crore, according to a report in The Indian Express.
The proceeds could be used to partly fund a modernisation programme of costing Rs9,13,000 crore over five years.
A 25-per cent increase in passenger fares can mobilise Rs37,500 crore, the committee said in the widely cited report.
The Pitroda committee was set up by railways minister Dinesh Trivedi in September last year. Its other members include HDFC chairman Deepak Parekh, IDFC chief Rajiv Lall and Feedback Venture's Vinayak Chatterjee.
Apart from an increase in fares, the panel has urged the railways to ''actively examine indexing passenger fares and freight with inflation to mobilise Rs25,000 crore'', and to shift to market-oriented fares, which it says could improve earnings by Rs10,000 crore.