Railways to rationalise passengers, freight fares

Railways to rationalise passengers, freight fares

Indian Railways. (File Photo)

Amidst mounting expenditure and dwindling revenues of Indian Railways, the government is working on to rationalise passengers and freight fares.

"We are going to rationalise the fares and freight rates. Something is being thought about. I cannot divulge more, this is a sensitive subject. While the freight fares are already high, our target is to draw more traffic from road to railways in this regard," Railway Board chairman, V K Yadav told reporters here.

However, he refused to say if the prices will be increased.

"Railways also taking a number of steps to increase its revenue. Increasing fares was a "sensitive" issue and it had to be discussed at length before a final decision was taken," he said.

There was a rumour that railways likely to announce passenger fare of all categories between five paise per kilometre to 40 paise per kilometre. Same time, the government may also announce the marginal hike of freight charges also. 

The last time fares were increased on June 25, 2014, soon after NDA government headed by Narendra Modi came to power. That time, passenger fares were hiked by 14.2% and freight fare increased by 6.5 %.

The Comptroller and Auditor General (CAG) in its report tabled in the recent Parliament session said that the Railways recorded an operating ratio of 98.44% in 2017-18 which is the worst in the previous 10 years.

Operating ratio shows how efficiently the railway is operating and how healthy its finances are. An operating ratio of 98.44% means that the Railways spent Rs98.44 to earn Rs100.

Due to a number of issues including economic slowdown, earnings of the national transporter suffering a dip of Rs 155 crore and Rs 3,901 crore in passenger and freight fares respectively in the second quarter of the current fiscal, compared to the previous one, said the Railways.

In the first quarter (April-June) of the financial year 2019-20, the railways earned a revenue of Rs 13,398.92 crore from passenger fares. This dipped to Rs 13,243.81 crore in the July-September quarter.

Salary and social obligations take away big funds of railways Railway Minister Piyush Goyal said earlier adding that after implementation of 7th Pay Commission, railway facing Rs 22,000 crore additional expenditure for salaries and pensions of its employees. This has contributed overall operating losses, he added.

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