Railways mulling options on passenger fare hike

Facing a cash crunch, the railway ministry is mulling two options for increasing passenger fares, with one being increasing fares in proportion to fuel price hike, and the other imposing higher fares on busy routes.

The move essentially would mean every time there was a diesel price hike, train travel cost would also go up.

According to railway ministry statistics, every Re1 hike in diesel price, burdens the ministry to the extent of Rs240 crore. This Rs240 crore would now be sought to be distributed among the 19 lakh passengers who use the railways daily.

However, no specific decision has yet been taken and railway minister Dinesh Trivedi has not come out with any specific date by when the new fare models would come into effect.

Addressing the economic editors conference in New Delhi on Wednesday, Trivedi said: "We need to do things intelligently. For health of the organisation, we have to look at various avenues. But we need to do things in a way that the poorest of the poor are not affected. We are considering whether fare hike can be related to fuel hike or be based on traffic on routes."

The decision, for the Railways, however, is going to be tough. While the annual loss on account of passenger operations has been estimated at Rs14,000 crore, which is subsidised from the freight earnings, major passenger revenues come from unreserved passengers at the lowest strata of the society.