Logistics

Mukul Roy rolls back fares; Rlys will lose out Rs 4,000 cr

Our Bureau New Delhi | Updated on March 12, 2018 Published on March 22, 2012

Mr Mukul Roy, Railway Minister

The new Railway Minister, Mr Mukul Roy, did the expected by announcing a wider rollback in the passenger fare hike. The rollback is proposed to be spread over second class, sleeper class, air-conditioned chair car and AC III-tier “in its entirety”.

In effect, he reduced the higher fares that over 95 per cent of rail passengers would have had to pay had Mr Dinesh Trivedi's proposal, which caused him to be sacked by his party leader Ms Mamata Banerjee, been implemented.

REVENUE IMPACT

Multiple sources from Railways indicate that the incremental passenger earnings will be hit to by over Rs 4,000 crore, which is almost 60 per cent of incremental passenger earnings. The dip in traffic earnings will result in lower spending on capital and development-related expenditure. This translates to lower demand for steel to build rail tracks, amongst others.

The change will worsen the operating ratio — expenditure per rupee earned — to about 87-88 per cent next fiscal. The Railways spokesperson sought more time to comment on the exact financial impact of these changes.

OTHER ROLLBACKS

Mr Roy, on his third day after taking oath as Railway Minister, also announced some other rollbacks of his predecessor's proposals. The proposals were regarding Railway Board's restructuring, inviting international tenders for catering, and the idea of a tariff regulator.

He said the Railway Board could do without two-top level posts — Member (PPP and Marketing) and Member (Safety). He added that in the railways catering space, the focus will be on ‘local talent' and there is no need to look for expertise “beyond our borders”. Mr Trivedi had proposed a pilot project to bring in international expertise in a few premium trains.

Mr Roy also red-flagged Mr Trivedi's idea of a debate on setting up of an independent Railway Tariff Regulatory Authority.





>mamuni@thehindu.co.in

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Published on March 22, 2012
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