Rail travel to cost more, fares may go up by 15-20%

27 Dec 2019

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Indian Railways is planning a revision of passenger fares and freight rates, in what the national transporter called "rationalisation" of the passenger and freight fares. As per the plan, passenger fares will be increased while the freight fares will be marginally decreased to compete with the road transport sector.

Addressing a press briefing on Thursday, Railway Board chairman VK Yadav, however, did not say whether passenger fares will actually be hiked and by how much, leaving it to speculation that passenger fares will see a hike of 15-20 per cent. 
He merely stated that passenger fares will be increased while the freight fares will be marginally decreased to compete with the road transport sector. Yadav, however, said that increasing rail fares was a "sensitive" issue and needed to be discussed at length before a final decision is taken in this regard.
"We are going to rationalise the fares and freight rates. Something is being thought about. I cannot divulge more, this is a sensitive subject. While the freight fares are already high, our target is to draw more traffic from road to railways in this regard," Yadav said.
The Railway Board chairman said that in the recent past, the Indian Railways has taken several initiatives to counter its dwindling revenues and its latest move to rationalise the passenger and freight fares is yet another step in that direction. 
According to sources, the Railway Board has prepared a blueprint of new passenger fare slab and a formal announcement in this regard is expected soon.  
Railways has seen a dent in its earnings with Rs155 crore and Rs3,901 crore fall in passenger and freight fares, respectively, in the second quarter of the current fiscal.
In the first quarter (April-June) of the financial year 2019-20, Railways earned a revenue of Rs13,398.92 crore from passenger traffic. This dipped to Rs13,243.81 crore in the July-September quarter. The Railways had in November extended the Flexi Fare scheme for a period of another one-year, that is, from 15 March 2020 to 14 March 2021.
In a statement Railways said the railway ministry has decided to extend the rationalisation of Flexi Fare scheme for another one-year.
The extension of the Flexi fare scheme will be applicable on the premium trains like Rajdhani Express, Shatabdi Express and Duronto Express, it said.
Flexi fare scheme was launched with effect from 9 September 2016. The scheme generated high revenue however initially there was a drop of passengers which picked up later on. Railways later decided in favour of discontinuation of Flexi-Fare in trains with average monthly occupancy of less than 50 per cent.

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