Railway Shocker

A whammy even before the budget!

Passenger fares for all classes increased.

Annual burden of RS 6,600 crores on the people

Good bye to telescopic fare fixation - flat rate charges now

Fare increase applicable to passes and season tickets too

Will come into force from the midnight of 21 January

 The sudden passenger fare increase struck like a thunderbolt without warning. The Central Government increased passenger rail fares  for the first time in a decade. The fare increase ranges from a minimum of 2 paise per kilometre to a maximum of 10 paise across all classes.

In a surprise move, the government announced its decision on the tariff hike one month before the Railway budget presentation. The Railway Minister Pavan Kumar Bansal announced in a press conference that the increased fares will come into force almost immediately from the midnight of January 21. The fare increase will also be applicable to Rajdhani, Shatabdi and Duranto trains.

Mr Bansal stated that monthly passes and season tickets would also be affected by this increase, but spared platform tickets. The new charges are expected to bring in an additional revenue of RS 6,600 crores. In the last two months of this financial year, RS 1200 crores would be earned by  the Railways. This would be utilised for improving Railway security and for providing better services. Bansal also proposed the annulment of the development charges on passenger tickets.

Passenger train losses have been heavily increasing......

Bansal deviated from the populist policies of the previous Railway ministers Laloo Prasad and Mamta Banerjee. He emphasized that since fares were held static for a decade, it took a heavy toll on Railway finances, making it inevitable to increase them now. Passenger train revenues, which recorded a loss of Rs 1059 crores in 2004-05, blew up to Rs 19,964 crores yearly by 2010-11, making it an 18% increase in losses. The estimate for the current financial year is of the order of Rs 25,000 crores. Investment costs have been soaring without any increase in train fares and lower class charges were actually reduced.

In response to a question from the press, he asserted that there will be no further increase when the railway budget is proposed next month. However to the query on freight fares, he declined to comment. In the context of IRCTC website crashing due to increased demand for e-tickets, he replied that new software and improved servers will be invested in. On the issue of  brokers and agents block booking tickets, he said that their actions towards curbing this are giving results now and that they will strictly implement ID proof requirement of travelling passengers to curb the block booking by brokers.

20% increase in revenue over last year

A comparison of the the revenue figures for eight months from April to November 2012, shows that Railways have earned a revenue of Rs 78,868.17 crores, up by 19.23% over same period the previous year. Of this passenger fares constitute Rs 20,423.31 crores.

The end of telescopic fare computation

By employing a flat rate per kilometre, the hitherto used telescopic fare calculation has been discarded. In the telescopic method, long distance travel had a fare advantage. Dinesh Trivedi, who was the Railway Minister before Bansal, had proposed an increase of 14.5% across all classes in February 2012, while presenting the Railway budget and paid for it by losing his portfolio. In his attempt to garner Rs 4000 crore additional revenue for the railways, Trivedi proposed passenger fare increase and earned the ire of his party chief, Mamta Banerjee and had to resign. His proposals of increasing first class, second AC, first AC/executive classes were accepted and the others were trounced. In light of this, it is intriguing that Bansal chose to increase fares one month before presenting the Raiway Budget.

- Sakshipost