Economy

Chorus for hike in passenger fares gets louder

AM Jigeesh Mamuni Das New Delhi | Updated on January 19, 2018 Published on February 05, 2016

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Even in Bangladesh and China, rail travel costs more, experts point out





With the Railways staring at a revenue loss of over ₹15,000 crore this fiscal, the chorus in favour of a passenger fare hike is rising.

“The revenue shortfall could be around ₹17,000 crore in the current fiscal. But, we also expect savings of ₹8,000 crore due to strict austerity measures and using open access (to get electricity).

Additionally, on account of less traffic, there is a dip in consumption,” said a Railway Ministry official.

Pitching for a fare hike, former Railway Board Chairman Vivek Sahai, who is now with Observer Research Foundation, told BusinessLine:

“A 2-3 per cent hike every year across the board in passenger fares will not pinch commuters.”

Pointing out that passenger ticket prices in India are even lower than in Bangladesh and China, SB Ghosh Dastidar, former Member-Traffic, Railway Board, said: “Passenger fares should be increased over two-three years to lower the subsidy element. There should not be any increase in freight charges.”

Ghosh Dastidar, who is now a consultant with Bangladesh Railways, said that Indian Railways, instead of linking fares with just fuel, should link it with input costs such as on ballast, sleepers and staff.

However, freight tariffs should not go up, said SS Khurana, former Railway Board Chairman. Only passenger charges should be increased across the board, he said, adding that the Centre should bear part of the passenger segment subsidy of ₹30,000 crore.

This view is also held by various sections of the government, such as the NITI Aayog. In a letter dated September 28, 2015 to the Railway Board, the Aayog has sought a commitment from the suburban railways on an increase in fares.

In the letter, while agreeing that more investments in urban transport are required, the Aayog has said: “…tariff is not keeping pace with the investments. There is an urgent need of fare revision, which is overdue. There should be automatic fare revisions instead of one fare hike.”

However, passenger fare hikes have always been a politically sensitive issue, with all governments resisting any hike in the past.

The first round of increase after the BJP-led NDA government came to power in 2014 gave rise to a huge uproar in the ruling party’s Maharashtra unit, leading to a partial rollback.

Wider call

This time around, Railway Ministry officials are tight-lipped on the issue.

However, the Ministry has uploaded a Morgan Stanley report, which says that though there is lack of political will in raising passenger fares, the reluctance is not really shared by passengers.

An NCAER (National Council of Applied Economic Research) survey, which included suburban, non-suburban and reserved and unreserved passengers, has also indicated that passengers are willing to pay more if they get better services, such as easier reservations, cleanliness, on-time train arrival, food and safety.

Published on February 05, 2016
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