Rail fare hike plan awaits Sonia’s green flag
Though Bansal had said last month when he announced the fare hike — which entailed additional passenger revenue of R6,600 crore (21%) over a full-year — that the rail Budget would not have any fare hikes, that is unlikely to be. What prompted the rethink is mainly an additional burden of R3,300 crore a year from the recent bulk diesel price deregulation.
Bansal is also looking at introducing a fuel adjustment component to address likely fluctuations in fuel prices, which account for 17% of the national transporter’s total spending.
There is scope for further hike in passenger fares, considering the railways earns 30 paise for carrying a passenger for a kilometre, while it gets Re1 per km for carrying a tonne of freight. Freight constitutes 65% of railway’s earnings while passenger revenue accounts for 27%.
Total revenue target for this fiscal (budget estimate) is Rs 1.35 lakh crore, but there is likely to be a 10% shortfall.
The railways is reeling under constant deficit in the passenger segment. Deficit which stood at Rs 1,059 crore in 2004-05, rose to Rs 19,964 crore in 2010-11, an increase of 18% annually. The losses are likely to go up to Rs 23,000 crore in