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With West Bengal elections ahead, the Railway Minister, Ms Mamata Banerjee, is unlikely to raise passenger fares on Friday when she presents Rail Budget 2011-12. The Minister on Thursday promised that the budget would be “people friendly”.
Though she has been under pressure from the Planning Commission to reduce the cross-subsidisation between freight and passenger services by increasing fares at least for upper classes, it may come as no surprise if she announces a fare reduction, even if a token, for some section of passengers.
The pressure on the Railways to appear people-friendly was evident when it indirectly contributed to inflation earlier this fiscal by hiking freight rates rather than increasing fares.
The move was driven by the need to increase earnings to offset rising working expenses on account of the hike in fuel price and the increasing staff costs. The freight rate hike made rail movement of even sugar and salt costlier by 11-13 per cent this January against January 2010.
In the first 10 months of the current fiscal, the Railways registered almost seven per cent hike in freight revenues over the corresponding previous period.
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