Railways is facing a severe financial crunch with passenger subsidy touching Rs 26,000 Cr

27 Dec

A general class train ticket from Delhi to Chandigarh costs Rs 94, the price of a 200 gm toothpaste, while the fare from Delhi to Patna is the price of a medium-size pizza at Rs 360. By comparing fares with everyday items, Indian Railways is projecting that trains are the cheapest mode of travel after being criticised for hiking fares.

The Railway Board has conducted a study through which it compared passenger fares on some of the busiest routes with common things such as brooms, wheat flour, pizza, toothpaste and others, to seek support for revising fares.

Railway Minister Suresh Prabhu did not announce any hike in passenger fares in the railway budget. The only increase was in tatkal tickets and in cancellation charges.

“There has been so much pressure on the Railways for not increasing passenger fares owing to political and social service obligations. A marginal increase invites so much criticism that it is more of a political decision than financial,” said a Ministry of Railways official. About the survey, he said, “We want to inform people that it is necessary to revise passenger fares to improve the financial health of the Railways.”

A Parliamentary Panel report found that the Railways’ social service obligation amounts to Rs 25,000 crore every year by carrying passengers and goods at discounted rates. The social service obligations include concessions and low tariffs in the second class.

The Railways is facing a severe financial crunch with passenger subsidy touching Rs 26,000 crore. It is worried over the Rs 32,000 crore needed to implement the recommendations of the Seventh Pay Commission. To add to it woes, the Railway Convention Committee has asked the Railways to pay a dividend at 4 per cent for 2015-16, leading to a payout of Rs 8,000 crore to the Centre for the current fiscal.

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Posted by on December 27, 2015 in Uncategorized


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