Railways Exploring Fare Hike On Select Routes

Attention railway commuters. Get ready to pay a little more for your train trips in AC coaches beginning April 1, 2016. Indian Railways may enforce a 5-15 per cent increase in the fares for AC coaches on select routes in the forthcoming rail budget scheduled for February 25th in return for better on-board services.

These are among a wide list of options being discussed by the Indian Railways in the run-up to the Rail Budget. Some of the other options include cutting costs, monetising unused railway land, introducing small user charges (where ever better facilities are introduced), among others.

According to Rail Bhawan insiders minister Suresh Prabhu is not keen on increasing passenger fares or freight tariffs. "He is keen on generating revenue from non-traffic sources like advertising, export of railway equipment, land monetisation or cutting working expenses where ever possible," a senior official said.

There are multiple reasons of worry for the railways as its finances are facing multiple challenges.

Between April 2015 and December 2015, Indian Railway has witnessed around 9 per cent dip in passenger revenue to Rs 33,963 crore and 8 per cent decline in freight revenue to Rs 80, 977 crore. There was a 5 per cent decline in the passenger bookings too in this period.

Then the dagger of implementation of the 7th Pay Commission recommendations also hangs over the head of Indian Railways as it entails an outgo of around Rs 28,000 crore to 12.5 lakh employees.

That is the reason the railway ministry is also exploring option to rolling back certain monetary concessions being offered to several categories of passengers that travel in the AC First Class.

According to a news report, concessional travel facility in AC First Class is currently being offered to 53 categories of beneficiaries which translates into Rs 1400 crore a year for the Indian Railways. The discounted categories include - senior citizens, doctors, war-widows, pregnant women, journalists, sportsmen, disabled, artists etc.

Then a recent proposal by the railways entailing a grant of Rs 32,000 crore from the finance ministry has not found favour in the North Block (housing the Ministry of Finance).

Recently, the tickets for the New Delhi-Varanasi superfast Mahamana Express were raised by 15 per cent after this thrice-a-week train (recently refurbished coaches and added facilities) was flagged off by the Prime Minister Narendra Modi last month.

As reported by BW Businessworld (2015: A Year Of Optimism For Indian Railways), between April and September of the current financial year, Indian Railways saw a shortfall of 142 million passengers compared to the corresponding period last year. In percentage terms, it amounted to a 5 per cent drop in passenger traffic and nearly 7 per cent fall in passenger revenue, compared to the Budget targets. In real terms, passenger earnings in the six-month period stood at Rs 23,108.38 crore as against the Budget target of Rs 24,814.48 crore. The cumulative passenger traffic for the same period stood at 4,110 million against projections of 4,327 million.

As per the BW's story, the revised total passenger traffic for 2014-15 stood at 8,228 million as opposed to 8,350 million. As one expert said, "For 2015-16, the projections for passenger traffic is 8,600 million and the corresponding earnings target of Rs 50,000 crore looks very challenging."