Railway Minister Pawan Kumar Bansal on Wednesday indicated that his ministry was moving closer to raising the railway fares.

The minister told reporters that his ministry was working on setting up a Rail Tariff Authority (RTA) which would suggest the quantum of passenger fare hike after taking into consideration all operational costs like existing diesel and power rates.

"The ratio of passenger fare to freight is 0.3:1 in India. In China it is 1.3:1. So you can imagine how low our passenger fares are,” he said.

Arguing for the physical and financial health of railways, he said railway revenue was increasing, but cross subsidisation for passengers fares was very high. “...There is a need to do something about it (fare hike). But there are many reasons for not being able to do it.
There is a need for depoliticisation of fare hike proposals,” the minister told reporters.
Fare for AC Ist and AC 2nd class were raised in the last budget though the others were left untouched