The government is actively considering a hike in fares of passenger trains after over five years since they were last raised when the NDA came to power. Sources told The Indian Express that the attempt is to get the hike implemented before the end of this financial year, if the political establishment gives the green signal.
Asked Thursday about the possibility of a fare hike in the future, Railway Board chairman V K Yadav told reporters that “something is being thought about” on these lines.
“We are going to rationalise both fare and freight. Freight rates are already very high so I don’t think we will be raising freight rates… in fact, we need to rationalise freight rates… to bring down logistics cost,” Yadav said.
He did not specify a timeline. “Being a very sensitive subject, I will not be able to give you any details, but some thinking is going on,” Yadav said.
Late Thursday, however, Railway Board spokesman R D Bajpai said that “there is no proposal to hike fares”. “Rationalisation of fare is a thought, which does not mean that fares will be increased, it may decrease also,” the spokesman said.
According to sources, a proposal to raise fares has been with government for months now with the Railways facing a financial crunch.
They pointed out, however, that the Railways presents fare hike proposals to its ministers from time to time. It had presented a similar proposal to previous Rail Minister Suresh Prabhu, who chose not to go ahead. Instead, a controversial “dynamic fare” system was introduced in 2016, which hiked fares of premium trains by up to 50 per cent. That policy was revised many times to bring down the hike.
This time, sources said, the hike proposed is through a multitude of “scenarios” presented before Rail Minister Piyush Goyal: sparing the lower classes; bringing them in the ambit of the hike; different hike slabs for different classes, even suburban classes; and, a per-kilometre hike.
Sources said the latest move could probably result in a hike of around 10 per cent. But it is not yet known in which shape or form the hike will be approved, they said.
The Railways is staring at a shortfall in revenue by over Rs 20,000 crore by the end of this financial year, sources said. The fare hike, considered long overdue, is to supplement income in the face of rising input costs, officials said.
The Railways has also not been able to earn enough non-fare revenue, despite several attempts and multiple directions from the PMO over the past six years, which has made hiking fares inevitable, sources said.
Prime Minister Narendra Modi had in April 2017 told the Railways to bring in a “creeping increase in passenger fares”. He had also asked in multiple meetings to increase the efficiency of rail services before more fare hikes.
The last hike in 2014 was a 14.2 per cent increase in fares and 6.6 per cent in freight rates — it was actually approved by the outgoing UPA government during its last days in office. Even then, following protests by the then BJP ally Shiv Sena, the hike in suburban fares was rolled back for travel up to 80 km.
Prior to that, the last time fares saw any real increase was during the tenure of Pawan Kumar Bansal when the minister raised fares across the board through a per-kilometre basis. Train fare hikes have been a sensitive political subject. In 2012, the then Railway Minister Dinesh Trivedi lost his job after raising fares in the Budget.