Rail travel is set to become costlier from January 21.
In a surprise move just over a month ahead of the Budget, Railway Minister Pawan Bansal has announced a fare hike for all classes, including AC-1 and AC-2 tier passengers who were hit by a fare hike in April 2012. There won’t be any fare hike in the Railway Budget, Bansal added.
For some segments, the hike is higher than what was proposed in the 2012 Budget. The across-the-board hike only spares Kolkata Metro rail.
“The hike, along with passenger growth, will result in incremental earnings of Rs 6,600 crore a year,” said Bansal. For the remaining period of the current fiscal, the Railways expects to mop up an additional Rs 1,200 crore.
A votary of a fare hike, Bansal, who took charge in October, had said that “it was important to act before the forthcoming Budget to shore up revenues of the Railways.” On what took him three months to translate intent into action, Bansal said with a smile, “I was new to the job…”
BROAD TRENDS
The hikes vary based on distance and passenger segments. But they are higher for non-AC and AC-3-tier passengers, who were spared in the 2012 Railway Budget. Fares will be rounded off to multiples of Rs 5.
For non-AC passengers, the hike ranges from 2 paise per km (second class, suburban passengers) to 6 paise (non-suburban passengers). For all AC passengers, the increase is 10 paise/km with the exception of second AC where the hike is six paise. There won’t be a separate development charge on passenger tickets.
Based on average distances that people travel, the hike is 25 per cent for second class suburban travel, 18 per cent for second class mail and express trains, 11 per cent for AC chair car, 10 per cent for AC-3 tier, and 3-4 per cent for AC-1 and AC-2.
Close to 85 per cent of the incremental income will come from non AC-passengers.
Rising passenger segment losses
Justifying the fare hike, Bansal said, barring AC-1, AC-2 and first class, the basic fares have not been raised in 10 years. The economic slowdown, he said, has also impacted the budgeted revenue. Losses in the passenger segment are expected to touch Rs 25,000 crore in 2012-13 against Rs 6,159 crore in 2004-05. Input costs have gone up by over 10 per cent.
Bansal added that subsidising passenger business was not possible any more as the freight segment was facing competition from other modes. He said that this hike will not wipe off the passenger losses, but will only lower them.
“The Plan size of Railways will touch Rs 51,000 crore this year instead of Rs 61,000 crore,” added Bansal.