The Delhi Metro Rail Corporation (DMRC) has justified the recent hike in the city’s metro fares on financial grounds. According to the agency, the increase which came into effect on Tuesday, was necessary to cover rising input costs and to keep providing “world class services to passengers”. The Union minister of state for housing and urban affairs, Hardeep Singh Puri, has offered a similar argument: “Our priority is to see that passengers of Delhi metro get proper facilities”. Seen in isolation, the financial viability argument appears sound.
In the past eight years, the input cost for metro service has increased by more than 200 per cent in repairs and maintenance alone. According to its annual report of 2015-16, the DMRC’s operating expenses — that account for almost half of its total expenditure — shot up to Rs 2,199 crore in 2015-16 from Rs 1,584 crore in the previous fiscal. It incurred a loss of nearly Rs 350 crore in 2016-17. The agency lost Rs 470 crore in 2015-2016.
But there are reasons more compelling that make it imperative for the government to subsidise public transport, including the metro. From enhanced mobility to its relatively low carbon footprint, the use of the metro has benefits that cannot be measured only through the commercial yardstick of profit and loss. This railway system connects the heart of Delhi and most of the NCR’s commercial centres with the city’s fringes, where a large section of its working class lives. In June last year, it had an average daily ridership of a little more than 27 lakh that included students, people from the working classes, blue-collar workers and middle-level executives.
The DMRC, in fact, expected this figure to go up to 39 lakh after the completion of the third phase of the metro by the end of last year. But in what should have been a message to the agency, the average daily ridership fell to about 25 lakh after the last fare hike in May. Even more worrying is a Delhi Commission for Women survey which shows that the recent hike will force more than 60 per cent women commuters to choose a “less safe mode of transport”.
It is nobody’s case that metro fares should not be revised. But the DMRC’s methods belie economic logic. The fares did not undergo revision for eight years since 2009. This year they have been hiked twice. As India’s cities expand, the metro is likely to be an important constituent of the transport mix. It is imperative, therefore, that the agencies in charge of them work out pricing models that do not stress the metro’s operations and at the same time ensure that the commuters are not overly taxed.